Champion, 26, spent six seasons with the Rabbitohs before leaving for Melbourne ahead of the 2011 season and then on to Gold Coast 12 months ago, but has seen appearances for the Titans restricted through injury.
He will now join up with Souths on a two-year contract.
Champion said: “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.
“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 scored four tries in nine games for the Titans, and eight tries in 16 games for Melbourne in 2011.
He previously played 70 games for Souths between 2005-10, scoring 33 tries.