"Despite our desire to retain all our internationals within the region, we have to balance our available resource over the need to sustain a 50-deep player squad that can continue to compete during international periods," said Scarlets CEO Mark Davies.
"Taking that into account, we made George the very best offer we could.
"However, we have to fully understand and appreciate that George's quite unique value in the rugby marketplace, possibly inside Wales, but certainly outside Wales, is considerably greater than the Scarlets as an independent business can reach.
"We are obviously massively disappointed to be losing a player of George's world-class quality and ability from Parc y Scarlets, however we appreciate the reality that the profile and success he has achieved in such a short space of time attracts huge attention and makes him a prized player for any club in Europe."
North made his Scarlets debut at the age of just 18 back in September 2010 having come through the Scarlets' development pathway in North Wales and via a bursary at Llandovery College.
He scored twice on his debut against Benetton Treviso and matched that feat in his first appearance for Wales against South Africa in November of the same year.
With 31 international caps to his name already, North has quickly become one of the leading lights in British & Irish rugby and is expected to make a major impression when the Lions head to Hong Kong and Australia this summer.
North is among the favourites for a starting spot when the Lions face the Wallabies in Brisbane in the first of three Test matches on June 22 but his club future has been the subject of much speculation and plenty of bad press over recent weeks.
The 20-year-old's switch to the English Premiership has been a divisive issue between the Welsh Rugby Union and the four Welsh regions and the Scarlets have admitted that it has been a difficult time for the player as well as themselves.
"The last few weeks have been made increasingly difficult with considerable added pressure on George, those close to him and the Scarlets with the continuing level of intrusion, speculation and debate from outside the region surrounding George's future with us," added Davies.
"We firmly believe that this situation illustrates that our policy of privacy for individuals is the correct and proper position for our business to take at all times.
"We fully respect the right of any individual to ensure they pursue the very best opportunities available to them and now that a final decision has been reached, we sincerely hope George will be allowed to get on and enjoy the rest of his season with the Scarlets.
"He will leave with our sincere thanks for all he has done for Scarlets Rugby and our very best wishes from everyone in our region for the future."