Speculation about Burgess' playing future had reached fever pitch in British and Australian media ahead of the NRL season.
Burgess, who plays with brothers Luke, Thomas and George at South Sydney, had remained tight-lipped amid the media attention until the club confirmed the move on Monday.
"I'm happy all this has all been sorted out before the start of the season so that I can concentrate on my game and the team without any other things in the way," Burgess said in a club statement.
"An opportunity presented itself to head back home to England and to pursue a chance to represent my country in two different sports.
"With 2015 being a rugby World Cup, it was an opportunity I had to pursue and I thank the Rabbitohs for allowing me to make this move and start the next chapter in my sporting career."
Burgess is to link with Bath in England's Premiership upon his return to Britain.
South Sydney open the NRL season against last year's winners Sydney City on March 6 in a clash that will feature Burgess against New Zealand's World cup winner Sonny Bill Williams.
Williams has already said he will leave Sydney at the end of this season and return to his native New Zealand in an attempt to try to crack the All Blacks squad for their defence of the Webb Ellis trophy in England.