The Rabbitohs will welcome Champion back after the representative centre spent one season at the Titans and a year at Melbourne, after playing his first six seasons at Souths.
Champion, 27, was released from his contract at the Gold Coast on Tuesday so that he could return to Redfern, where he also played as a junior.
The Indigenous All Stars representative was forced out of the Rabbitohs back in 2010 to make way for star signing Greg Inglis.
Champion, who has played 95 games including 70 for the Rabbitohs, declared he was thrilled to be returning home.
“I’m over the moon at having the opportunity to return to South Sydney, the club where my career began, the team which I supported as a kid and the club which I’ve always dreamed of playing for,” Champion said in a Rabbitohs statement.
“I appreciate everything the people at the Titans and Storm have done for me over the past two years and I think my time at both clubs have made me a better player and better person.
“However now that an opportunity has come up to rejoin Souths, I can’t miss the chance to return to the club.
“The club has taken some big strides forward since I was last there and I’m looking forward to being part of a renewed South Sydney and representing the district and the Members once again.”
Souths coach Michael Maguire said Champion would be an important addition to the Rabbitohs' backline.
“Beau is a very experienced NRL player who has the South Sydney team and the club as his central focus,” Maguire said.
“He understands what we’re trying to achieve here and the culture we’re building, and we’re very happy to be able to add a player of his ability to our squad at this stage of the pre-season.
“Beau’s inclusion to our squad increases the challenge for spots in our first grade team, which is always good for performance and team development.
“Beau is South Sydney through-and-through and we’re sure he will produce some of his best football with us over the next two seasons and beyond.”