The move comes barely a month after the 26-year-old centre said he would not be leaving Parramatta Eels as he would not see enough of the ball in union.
He explained: "A few weeks ago I was quoted as saying that I wouldn't switch to union as I would want to touch the ball more than once a game. This was a direct quote to stamp out any rumours regarding my interest in rugby union.
"I wanted to make this decision on my own, along with my family and not be influenced by outside forces. This is why I have negotiated to join the Australian Rugby Union without the fanfare. As you can see it has been achieved."
Tahu broke the try-scoring record for his former club the Newcastle Knights with 82 in 97 games, as well as making 11 State of Origin appearances and representing Australia five times.
The signing is the second coup in a week for the Waratahs after they managed to hold on to dual international Lote Tuqiri, who was coveted by rugby league sides South Sydney, Cronulla and Brisbane.
"It is an exciting time in my career having been fortunate enough to achieve so many things in rugby league from grand finals, State of Origin series and ultimately playing Test matches for Australia," Tahu said.
"The challenges I have set myself by signing a four-year contract with the Australian Rugby Union is to duplicate that success.
"During negotiations with the ARU and Waratahs I was excited with the direction rugby union is taking for the future.
"It was great to see LT re-sign with the ARU and Waratahs and I am salivating at the possibility of running alongside him again."
National coach John Connolly believes Tahu's experience will be a great addition to Australian rugby.
"He is a proven try scorer who has played at the highest level in rugby league and will bring a lot to the programme," Connolly said.