Davies has become the latest international to sign a National Dual Contract and takes the total number of players now on joint WRU and Regional contracts based in Wales to 17.
The 27-year-old will return to his Region of origin in Wales under the terms of the NDC, which has been jointly announced by the WRU and Scarlets today.
Today's announcement sees him join a strong pool of international players already signed up for the 2016-17 season at Parc y Scarlets. Captain Ken Owens leads an impressive group of players who have committed their futures to Scarlets Rugby including Jake Ball, Rob Evans, Samson Lee, Liam Williams and John Barclay.
Davies, an established international with 48 caps for Wales and a successful Lions tour under his belt, is happy to be returning home.
"I am delighted to have signed a National Dual Contract and to be returning to the Scarlets," he said.
"I have immensely enjoyed my time in France and would like to thank Clermont Auvergne for the opportunity.
"The joint commitment between the WRU and Regions is driving for success and I believe the time is right to return to Wales and signing a NDC is the best decision for me rugby wise."
The Group Chief Executive of the WRU, Martyn Phillips, said: "We are delighted to have been able to bring a player of Jon's quality home to Wales from France to play for Scarlets.
"His return demonstrates the value of the NDC's as a means of ensuring as many of the most talented players as possible play their rugby here in Wales.
"Here in Wales our four Regions are ambitious for success and the WRU will continue to work alongside them to achieve that."
The Chief Executive of the Scarlets, Darran Phillips, said: "We are delighted to announce that Jon Davies is returning to his home region. Jon developed through the system with us here at the Scarlets and his return to the region is further evidence of our ambition to be competitive at the highest level."
The players contracted on NDC's are Sam Warburton, Alun Wyn Jones, Dan Biggar, Rhys Webb, Dan Lydiate, Scott Williams, Jake Ball, Samson Lee, Rhodri Jones, Tyler Morgan, Hallam Amos and Gareth Anscombe.
