The 27-year-old former Bulls stalwart arrived at Worcester on a short-term contract in February but has now put pen to paper to sign a permanent deal.
Hougaard, who previously picked up two Super Rugby titles with the Bulls in 2009 and 2010, joined Warriors following a spell with the South Africa Sevens side and will return to the Sevens circuit for this summer’s Olympics in Rio de Janeiro, Brazil.
The livewire number nine will then report back to Sixways and becomes Worcester Director of Rugby Dean Ryan’s sixth new signing ahead of the 2016/17 campaign.
Ryan said: “Francois has come in and had a huge influence on the side in such a short space of time.
“You can see the difference he has made to the squad and that comes from a wealth of experience from his time in Super Rugby and playing internationally.
“We’re delighted he’s decided to be a part of our journey and we hope he can be a catalyst for us moving forward.”
Hougaard, capped 35 times for South Africa, said: “I haven’t been here long but I’ve become really fond of Worcester.
“There are incredible facilities and the Club have great ambitions which is something I’m really excited about being a part of.
“There are a great bunch of players here and they’ve made the transition very smooth since coming from South Africa Sevens.
“Now my aim is to help drive Warriors up the Aviva Premiership table to achieve our long-term goal of becoming a top European side.”