The 29-year-old dual rugby international has penned a two-year deal with the Ranfurly Shield holders.
Williams won the 2011 Rugby World Cup with the All Blacks and the Super Rugby title with the Chiefs the following year before returning to rugby league.
He helped the Sydney Roosters to last year’s NRL crown but confirmed in December he would return to rugby union at the end of this season after signing a two-year agreement with New Zealand Rugby.
“I have enjoyed my time in Australia and at the end of the season I will be ready for next chapter of my career back in New Zealand,” Williams said.
Steelers coach Umaga, who played with the second five-eighth at French club Toulon, hoped the signing would be a boost for young players in the region.
“Sonny is an outstanding man, whose work ethic, ability and motivation are exceptional. He will be a great role model to our younger players and an inspiration to the young people of south Auckland,” Umaga said.
Williams, who has one eye on playing sevens at the Rio Olympics, will play his Super Rugby for the Chiefs.
He has played 19 rugby Tests for the All Blacks and appeared 12 times for the Kiwis.