Bunnies welcome back Burgess
The "Bunnies" made the announcement after the BBC reported Burgess had left Premiership club Bath with immediate effect, igniting recriminations over his treatment in the union game.
Reports suggested the Rabbitohs, whose owner is Oscar-winning actor Russell Crowe, paid Aus$1.5 million (£700,000) a year to secure the 26-year-old.
Burgess, who had two years left on a three-year deal with Bath, will reunite with brothers George and Thomas at the Rabbitohs until at least the end of the 2018 season.
"I cannot wait to get back into the Rabbitohs culture, full of great people and passionate members and supporters," he told the club's website.
Coach Michael Maguire also welcomed him back.
"He had an enormously positive impact on our club, both on and off the field, throughout the five seasons he was here," said Maguire.
"To be bringing back one of the game's most dominant players is fantastic for not only our club, but the game itself," he added.
Crowe offered the new signing as an early Christmas present to supporters.
"To all @SSFCRABBITOHS fans and Members in good standing [@SSFCMembership] , Merry Christmas!!!!@SamBurgess8 ," Crowe tweeted.
Burgess admitted he had badly missed his family.
"I must also thank Bath especially for granting my release to return home to my family who I have missed more than I could have imagined.
"I had a wonderful time in England and learnt a lot about the game of Rugby Union as both a back and a forward, and I have definitely developed as an all-round player and athlete after that.
"I'm now very lucky to be given the chance to come back to Souths and serve this club," said Burgess, who has played 96 National Rugby League matches for the Rabbitohs.
As part of the England squad that recently became the first World Cup host nation to exit the tournament in the group stages, Burgess became embroiled in Union politics with coach Stuart Lancaster criticised for what many saw as an overly rapid promotion.
It was only last year, after helping South Sydney win the Australian NRL Grand Final, that Burgess changed codes to try to play at the World Cup.
His brief spell in Union has proved embarrassing for both Bath and Lancaster, whose position is under scrutiny in a review into the team's woeful World Cup.
Bath picked Burgess as a flank, while Lancaster controversially deployed him in the backline at inside centre where he often looked lost.
Bath Rugby head coach Mike Ford said: "We hoped that Sam would stay at Bath. He was doing really well in making the switch over from League and, given time, he could've been a great Rugby Union player. Unfortunately, for personal reasons, he is returning to Australia.
"However, we're fortunate that we’ve got some very high calibre players here at the club, and with a big run of games coming up in the Premiership and the European Rugby Champions Cup, we'll be fully focused on these."
Former Wales dual-code international and commentator Jonathan Davies called the episode a shambles.
"It's been a total shambles for everyone involved but you can't blame @SamBurgess8. Best of luck Sam," Davies tweeted.
Ex-England flyhalf Olly Barkley blamed England Rugby.
"If @SamBurgess8 has gone back to League then it's fair to say @EnglandRugby should hold their hand up. What a waste, what a mess," he said
England flank James Haskell voiced regret that Union had lost a "star in the making".
"I'm sad because I'm losing a friend and Rugby Union is losing a star in the making, but you can understand why he's doing it," he told BBC Radio Five.
Haskell scotched reports that Burgess' sudden rise had caused friction in the team.
"If anyone ever did think anything critical they certainly didn't say it and I never saw any of it.
"He's an unbelievable Rugby League player, a guy who gave it his best shot at Rugby Union and made the England team and made the World Cup. I think he's got to be pretty happy with that."
Burgess, who only won the first of his five England caps in a World Cup warm-up in August, made three appearances during the tournament, but only one start, and failed to make much of an impression.
Engaged to an Australian journalist, Burgess has three brothers all playing rugby league in Australia. Their mother, Julie, has been teaching at a Sydney school.
Agence France-Presse