Kewell, 32, has been out of contract since his contract with Turkish giants Galatasaray expired in the summer, and was initially certain to sign for Victory.
However, the move hit a snag when he was reported to be holding out for a more lucrative deal, and was entertaining offers from several Middle Eastern sides.
Nonetheless, those rumours were put to bed on Saturday with Victory confirming they had landed the Australian international, who brings with him a wealth of experience, having starred in the Premier League with Leeds and Liverpool in the past.
Victory chairman Anthony Di Pietro was quick to welcome the winger to the club in what he deemed "the most significant signing" in the history of Australian football.
"Melbourne Victory, as an ambitious club, wishes to bring success and the highest level of talent to the club for our supporters," announced Di Pietro, on the club's official website.
"We are delighted to announce that Harry has chosen to play for our club.
"Our discussions with Harry have been progressing for some time and we are delighted to have completed what is the most significant signing in Australian football and Hyundai A-League history."
Kewell himself spoke of his delight at having the opportunity to return to his home country to ply his trade, and was especially pleased to have signed for a club of Victory's magnitude.
"I am delighted to be joining Melbourne Victory," Kewell revealed. "It is a great club whose record in the A-League speaks for itself.
"I am looking forward to playing in front of the Victory supporters with my new team mates.
"I am proud to be Australian and want to give something back to the game there.
"It has always been my ambition to play in my home country and I am very pleased to have that opportunity by playing for Melbourne Victory."
Victory have been crowned champions of the A-League twice in the competition's six-year history.