We investigate a pair entanglement of electrons in diatomic molecule, modeled as a correlated double quantum dot attached to the leads. The low-temperature properties are derived from the ground state obtained by utilizing the Rejec–Ramšak variational technique within the framework of EDABI method, which combines exact diagonalization with ab initio calculations. The results show, that single-particle basis renormalization modifies the entanglement-switch effectiveness significantly. We also found the entanglement signature of a competition between an extended Kondo and singlet phases.