25-year-old Tadić has penned a four-year contract and moves from Dutch side FC Twente for an undisclosed fee.
He becomes Ronald Koeman’s first signing as Southampton manager, as the club begins the process of building a team for the future in keeping with the Southampton philosophy of attractive, attacking football.
The attacking midfielder finished top of the Eredivisie’s assists table with 14 season, and his 16 goals made him the fourth-highest scorer in the division.
Tadić has 25 caps for his country and has been playing in Holland since 2010, having initially moved from his homeland to FC Groningen – the former club of Ronald and Erwin Koeman.
Dušan Tadić said: “It is a really nice feeling to sign. This is a really nice club of which I have heard a lot of good things about.
“I have already seen the beautiful training centre and there are lots of nice people that work here including the coaches so I am really happy to be here.
“I watched a lot of [Southampton’s] games last season and saw that the club plays really nice football which will suit me because I like to play in the same way.
“The manager obviously knows me from the Dutch league so, when he called me and told me his plan, it was an easy decision to make.
“I know the manager well because he is one of the biggest Dutch legends in football – everyone knows him.
“He is a really good coach and you can always expect his teams to play well because he is leading them and because he is so good tactically. I am really excited to start playing for the club.”
First Team Manager Ronald Koeman added: “It was very important to get this signing done – not only for me, but for the rest of the squad and for our fans. It’s fantastic news.
“We’ve lost some good players but we want to continue the ambition and philosophy of the club, so it’s a great signal to have brought in our first player.
“He’s a great player. I know him very well from Holland, where he had a great season last year.
“We now look forward to bringing in more players because we want to continue and maybe even better what Southampton did last season.”