The 25-year-old Hougaard kicked the winning conversion in the closing seconds of the 2007 Super 14 Final when the Bulls, under the leadership of new Tigers head coach Heyneke Meyer, became the first South African winners of the tournament.
Tigers chief executive Peter Wheeler said the club was delighted with the signing and he believes the Guinness Premiership and Heineken Cup will suit Hougaard's playing style.
"We were very impressed by his performances during the last year and we believe he still has many great years ahead of him, Wheeler said.
"Derick is only 25 and he has not realised his full potential yet. He has a very good working relationship with Heyneke and I hope we can help him to maximise his potential as a player.
Hougaard made his provincial debut as a teenager in 2002 and earned his first senior cap with South Africa the following year, joining the squad for the 2003 Rugby World Cup. He has scored 69 points in his eight Tests.
After agreeing his move to Welford Road, Hougaard said: I think this is a wonderful chance to test myself against the best players in the northern hemisphere.
"I am looking forward to working with Heyneke. He has the ability to get the best out of a player and he has had an enormous positive influence on my career."
Chief executive of the Blue Bulls, Barend van Graan, said: "Derick leaves the Bulls with our best wishes. He was a huge asset for us and we wish him all the best for the future."
