The deal will ensure the young half is in Redcliffe until at least the end of the 2025 season following the completion of his time with the Panthers at the end of this season.
Spending the first couple of games of the season in the team with some excellent performances, he has then been used again during the Origin window and will be first into the side if either Cleary or Jarome Luai are injured or suspended.
The 23-year-old has been previously linked with a switch to the Dolphins, although it was a move squashed at the time by Wayne Bennett, although the coach has always wanted to coach O'Sullivan, according to Dolphins' CEO Terry Reader.
“We are very excited to be bringing Sean to the Dolphins,” Reader said.
“He showed last year with the Warriors that he was a quality playmaker, and he has backed that up with his performances for the Panthers this year.
“Our coach Wayne Bennett is especially pleased to finally be able to coach one that got away from him.
“He recruited Sean to a contract with the Broncos before he moved to the Roosters, and now he will get to work with him in a new team.
“Sean fills a major need on our roster and we look forward to seeing what he can do in the Dolphins’ colours.”
O'Sullivan has played 25 NRL games across four clubs, having spent time with the Roosters in 2018, the Broncos in 2019 and 2020, and the New Zealand Warriors in 2021, where he played 12 games in a season.