Williams (24) made the announcement on Australian television, saying he had signed with the New Zealand Rugby Union for a crack at the All Blacks later this year.
NZRU chief executive Steve Tew welcomed Williams' commitment.
"We're delighted that after some very positive discussions with Sonny Bill's representatives, he has today signed a contract committing himself to rugby in New Zealand from the start of the ITM Cup season, through to the end of 2011.
"Sonny Bill has proved himself as an outstanding athlete and a skilful player in two codes and has shown his rugby potential with Toulon in France.
"He will be an exciting addition to the 2010 ITM Cup domestic competition."
Williams has yet to decide which province and Super rugby franchise he would join.
"My first decision has been to commit to New Zealand and I've done that today," he said in Sydney.
"The next step will be to decide on a province and I'll decide that closer to my return to New Zealand early next month.
"I'm coming home to pursue my childhood dream and work towards earning an All Blacks jersey.
"The first priority after choosing a province will be to focus on settling into New Zealand rugby and preparations for the ITM Cup," he said.
Thorn, who quit the All Blacks to return to league with the Broncos and won a NRL premiership in 2006 before crossing back to rugby, was excited about the possibility of Williams becoming a team-mate.
"I can't speak highly enough of him as an athlete. Usually you hear hype about a guy but they usually don't fulfil that," Thorn said yesterday.
"When I went back to league I thought he was every bit like the hype about him. He's an amazing athlete...
"His footwork ... he's an explosive, powerful, natural footballer. I think he'd go really well ..."
