Ulster's second Southern Hemisphere signing in two months - following the tying-up of a deal with Waikato scrum-half Isaac Boss - Harrison turns 31 next month, and has played more than 80 Super 12 matches for the ACT Brumbies and the Waratahs.
He made a telling Wallaby debut on the 2001 British and Irish Lions tour, clashing with England's Austin Healy, who famously dubbed the 6ft 8in Sydney-born second row 'a plank'.
With the Super 12 season just two matches in, and the Waratahs currently top, Australian Rugby Union (ARU) Managing Director and CEO Gary Flowers admitted: "Australian Rugby made Justin a very good offer - for a player of his experience and standing in the game - and he was well aware that we were prepared to continue the negotiation process.
Australia coach Eddie Jones added: "Justin has been a member of the Wallaby squad for four years now and has made an outstanding contribution to the team.
"His departure is disappointing. However, we are confident there are a number of good young players ready to take up the challenge."
Harrison - who did not starting playing the game until leaving school - earned his 34th Test cap for Australia in their 21-19 Twickenham win over England last November.