The 28-year-old, who has been with the Dragons since the inception of regional rugby in 2003, was one of the stand-out performers during Wales' recent march to the World Cup semi-finals, including a towering individual display in the quarter-final win over Ireland which saw him make a remarkable 16 tackles in the first half before being forced off with an injury.
With the 6ft 9in forward's contract running out at the end of the season he had been heavily linked with a move away from Rodney Parade, and he will leave to join an undisclosed European team, with French side Perpignan, home of fellow Wales international James Hook, the favourites to land his signature.
"I've really enjoyed my time at the Dragons," Charteris said. "I have had some amazing team-mates here and the coaching team have been really good to me.
"However, being a professional rugby player gives an opportunity to travel and see the world which I feel I can't pass up.
"The chance to live in a different country and enjoy a new culture and way of life is one not everybody gets. A player's career doesn't last forever and I want to experience as much as I can.
"I have always been very clear that if I was to stay in Wales it would be with the Dragons. This is my region and it has been a really difficult decision to decide to move on.
"I'm only 28 and I see the Dragons as my home team so after a stint abroad I could perhaps come back a better player to Rodney Parade.
"I'd like to thank everybody at the Dragons who has helped and supported me through the ups and downs and especially the Dragons fans. We are really lucky at Rodney Parade to have the supporters we do."
Charteris' decision to ply his trade outside the principality comes just weeks after Wales coach Warren Gatland warned that squad members not playing club rugby in Wales risked missing out on selection for the national side if they could not make themselves available for squad sessions.
Player release for squad members in Wales is covered by the Participation Agreement between the four regions and the Welsh Rugby Union, but clubs in England and France are not obliged to release their players for periods outside the designated International Rugby Board Test windows.
Charteris' exit from the Gwent side may also reignite the debate about the funding of the professional regions.
Cardiff Blues' backs coach Gareth Baber had earlier this week echoed previous calls from Ospreys supremo Scott Johnson that the regions should receive top-ups from the WRU in an effort to enable them to hold on to their best players.
Hook, Mike Phillips and Lee Byrne have already made moves to France, while props Gethin Jenkins and Adam Jones have also been linked with moves to French clubs.
Dragons director of rugby Robert Beale said "We are obviously disappointed to be losing a player of Luke's calibre and I'd like to take the opportunity to thank Luke for his services and professionalism whilst at the Dragons."