Making his international debut in 2010, the former Blues half back will be returning to his home country after a season north of the border with Edinburgh.
"I'd like to thank the coaches, staff and fans of Edinburgh Rugby for their support this season," said Rees
"I've made some great friends here and there's a lot of talent who have the potential to be top class, and I'd like to I wish them all the best in the years to come.
"I remain totally committed to the club for the remainder of my contract and look forward to returning to Wales and joining up with my new club mates in a very ambitious Dragons side."
"We are delighted to be signing a player of Richie's caliber," said Dragons Head Coach Darren Edwards. "It has been well documented that we have a great deal of potential at scrum half in Jonathan Evans and an experienced game controller in Wayne Evans. But we are looking to strengthen and make many positions in our squad competitive to improve our performance".
"Richie is a proven competitor on both the international and regions stage and has desire to come to the Dragons to make an impact".
The signing was also confirmed by Edinburgh:
Edinburgh Rugby today confirmed that Welsh internationalist Richie Rees will leave at the end of the season to join RaboDirect PRO12 side Dragons.
The mutually agreed transfer was negotiated a year into his two-year contract to increase the opportunities for Scottish scrum-halves at the Murrayfield club, combined with the Newport side's desire to attract experienced Welsh talent to their ranks.
The return of Scotland A internationalist Sean Kennedy from his loan spell at Glasgow Warriors will complete the club's stable of scrum-halves, where he will compete with captain Greig Laidlaw, Chris Leck, Alex Black and Sam Hidalgo-Clyne for the number nine jersey.
Rees has made 21 appearances for Edinburgh Rugby since he arrived from Cardiff Blues in the summer with nine Welsh caps to his name.
He said: "I'd like to thank the coaches, staff and fans of Edinburgh Rugby for their support this season.
"I've made some great friends here and there's a lot of talent who have the potential to be top class, and I'd like to I wish them all the best in the years to come.
"I remain totally committed to the club for the remainder of my contract and look forward to returning to Wales and joining up with my new club mates in a very ambitious Dragons side."
Edinburgh Rugby managing director, Craig Docherty, added: "There are a number of young talented scrum-halves coming through the ranks at Edinburgh Rugby, who we feel are ready to take the next step as senior professionals at the club.
"This deal allows us to continue developing top quality Scottish talent, while allowing a player of Richie's quality to pursue his career in his homeland.
"Richie is a lively character and has been a popular member of the squad since his arrival in the summer last year and we all wish him all the best in Wales."
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