The 31 year-old made his only appearance for the Springboks so far, against the All Blacks, in last year's Rugby Championship.
That international cap followed a successful loan season with the Sharks where he played 16 Super Rugby matches.
Van der Merwe represented South Africa at Under 21 level and began his senior career with a three-year spell at the Leopards.
He has spent seven seasons at the Golden Lions winning the Currie Cup in 2011. Lions' player of the year in 2013, his game time has been restricted this season following an ankle injury. He will join up with Ulster Rugby in the s ummer following the conclusion of the Super Rugby season.
Commenting on his move to Ulster, Van der Merwe said: I am very much looking forward to joining Ulster Rugby. It is a very strong province and the set up is so professional.
"I spoke with Johann (Muller) and Ruan (Pienaar) about Ulster Rugby and they had only had good things to say. That made the decision really easy for me."
David Humphreys, Ulster's Director of Rugby, said: "I am delighted that Franco has agreed to join Ulster Rugby. His Super XV experience, his lineout ability and his leadership qualities were what set him apart from the others that we spoke to over the past few months.
"His recent international cap for South Africa has only made him more ambitious to achieve further success in his rugby career."
Humphreys added: "In the past few seasons we have recruited top-class international players to compliment our panel of highly talented homegrown players. Fr anco will play an important role for Ulster both on and off the pitch in developing this talent even further and I have no doubt that he will be a big success at Ravenhill."
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