The three-year deal will see Habana make the move to the south of France as the 2013/14 Top 14 season gets underway.
The move confirms one of the worst kept secrets in South African rugby, following an extended period of speculation which has seen him linked with the star-studded French outfit a number of times.
The 2012 SA Player of the year in will join fellow World Cup-winning Boks Bakkies Botha, Gurthro Steenkamp and Danie Rossouw in a team that is captained by Springbok loose forward Joe van Niekerk.
"Rugby Club Toulonnais has an incredible pedigree and some phenomenal players and working with everyone there is going to help me improve my game - and hopefully I can bring something new to the team there as well," said Habana.
"I'd like to thank everyone at Western Province for their support throughout my stay in Cape Town.
"I've had three great seasons in the Cape thus far and I am looking forward to finishing off on a high before taking on a new challenge overseas. Hopefully we can build on the success we experienced last year - this young team has the opportunity to dominate for years to come and I'm proud to be sharing my experience with the next generation of star players."
Western Province Rugby CEO Rob Wagner commented: "As sad as it is knowing that Bryan will be leaving us after this year's Super Rugby season, he does so with our blessing and we would like to thank him for his contribution to the Western Province and Stormers teams over the past three years."
Capped 83 times at Test level for the Springboks - and their all-time leading try-scorer - Habana has made it clear that he is available to continue represent his country, should he be selected.
"Playing for the Boks is a huge part of my life and I would never turn my back on my country," he said. "I'll never stop giving 100% on the field for any team I play for and if the Springbok coach picks me, I'll be there."