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Borders head coach Steve Bates said: "We're pleased to welcome someone of Gregor's international status back to Netherdale and we look forward to profiting from his experience and stature next season. He will fill a key role as a frontline player for us with the additional aim of him taking on responsibilities on the coaching front .
"We see Gregor as a player who aligns with our philosophy and the experience he gained in France and South Africa during his time away from The Borders will undoubtedly broaden our game. We have bolstered our pack and Gregor will complement that by forming a sparkling partnership with scrum-half Chris Cusiter," he added
Townsend said: "I'm really excited to be returning to The Borders and I'm determined to play as well as I can and for as long as I can for them.
"I'm also very enthusiastic about becoming involved in the coaching. I've been following the team as closely as I can from France and I saw the victory against Edinburgh at Netherdale last Hogmanay. There are a lot of good young players and I've heard a lot of positive things about the coaching structure so I'm raring to get involved."
Asked whether he would be available to play for Scotland, Townsend said: "That's something I'm not really thinking about at this stage. My main focus is on playing as well as I can for The Borders but never say never."
