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Grant, 26, has played 114 NRL matches since making his debut for the Penrith Panthers in 2007, and will play in the cardinal and myrtle of the Rabbitohs until at least the end of the 2018 season.
Grant will add some experience and firepower up front for the Rabbitohs, according to Rabbitohs Head Coach Michael Maguire.
"Tim has represented his state and played over 100 first grade games, so he will bring experience to our pack as well as strong defense and plenty of size," Coach Maguire said.
"He will add strength to our front row rotation, and we're looking forward to him joining our squad next pre-season."
Grant said he is excited to be joining the red and green next season, but has unfinished business at the foot of the mountains in 2014.
"South Sydney is a great Club and I'm looking forward to joining them next season," Grant said.
"However in saying that, I still have a job to do here at Penrith for the remainder of this season, and I'll be doing everything I can to help the Panthers have a successful year in 2014."