Parker, who will line up in the Wales midfield for tonight's clash with Argentina, was tracked by Zurich Premiership giants Gloucester, Saracens and Sale after he landed in rugby wilderness with the demise of the Celtic Warriors.
The Bridgend and Pontypridd franchise was disbanded when owner Leighton Samuel sold up to the WRU, keen to reduce the number of clubs from five to four.
Parker was known to be furious at the move, blacking out the WRU logo in a recent match with the Barbarians as well as refusing to shake hands with Union executive David Moffet.
But despite his anger New-Zealand-born Parker has opted to snub a move across the Severn Bridge and instead follow fellow former Warrior and Wales team-mate Brent Cockbain to the Ospreys, a decision that delighted the region's rugby manager Derwyn Jones.
"Keeping Sonny in Welsh rugby has been quite a challenge as he was clearly disillusioned in the wake of the Warriors demise," said Jones. "He was keen to join a club that could offer him stability on and off the pitch, and we were aware that he was being courted by Sale, Saracens and Gloucester as well as other Welsh regions.
"At the end of the day he has joined us for rugby reasons and it is clear from the meetings we have had that his attitude and values are in line with what we are about at the Ospreys.
"He is one of the current Welsh internationals who would be guaranteed a place in any side and he will bring additional quality and experience to our back line."
The news is a further blow for the Cardiff Blues who had hoped to lure Parker to the Arms Park as a ready-made replacement for Iestyn Harris' imminent return to Rugby League.