The 25-year-old was one of the lynchpins in the Blue Bulls' Currie Cup triumphs in 2002 and 2004 and was the best goalkicker in the 2007 and 2008 Super 14 tournaments.
Hougaard will be joining forces with his former coach, Heyneke Meyer, at Welford Road after signing a three-year deal with the English giants. The Blue Bulls released him from his contract, which ran until 2011, to make the switch.
"I think it is a wonderful chance to test myself against the best players in the Northern Hemisphere. I would like to play for the Bulls again in the future, but I am looking forward to working with Heyneke and competing in the Heineken Cup," said Hougaard.
"Heyneke always had the ability to get the best out a player and ever since I was young he backed me. It goes without saying that he had an enormous influence on my career.
"I've been blessed to play in quite a number of Currie Cup finals, as well as being part of a winning Super 14 team, and I guess I don't always realise how fortunate I have been."