The 30-year-old centre has spent the last four years playing with Warrington in England’s Super League but will reunite with former Melbourne Storm teammate Greg Inglis in the centres at Redfern in 2012.
King’s recruitment will give the Rabbitohs a distinct Storm flavour, with backrower Michael Crocker also at the club and incoming coach Michael Maguire a former Melbourne assistant to coach Craig Bellamy.
Alongside Inglis, King gives the Rabbitohs a potent midfield combination, having played 10 Tests for Australia on top of nine Origin matches for NSW.
“Matt was one of the leading lights during Melbourne’s dominance of the competition, alongside players such as Greg Inglis and Michael Crocker, and also our new head coach in Michael Maguire,” Rabbitohs chief executive Shane Richardson said.
“He has the runs on the board and we’re looking forward to welcoming Matt and his young family to South Sydney next season.”
The Rabbitohs released some pressure under the salary cap by granting backrower Shannan McPherson permission to walk out on the remaining year of his contract to take up a long-term contract with an unspecified Super League club.