Skinstad will follow a long line of former Springbok stars who have played at Rodney Parade and will join his former Test colleague Percy Montgomery in the Dragons line-up.
Other ex-Springboks who played with distinction in Newport in recent seasons were Gary Teichmann, Franco Smith, Robbie Kempson and Adrian Garvey. Current Dragons skipper, Andy Marinos, played with Skinstad in South Africa for the Super 12 side Western Stormers.
The signing of Skinstad comes at the end of a week in which the board of directors of Dragons Rugby Limited have thrashed out a blueprint for the future of the new regional club
"I am prepared to put my support behind NGD until 2006. Hopefully, this will help to bring some degree of security and stability to the region over the next few seasons," said Dragons Rugby Limited director Tony Brown.
"The Dragons have surprised everyone this season with their results on the field, although many of us who have been involved with the old Newport club and the Gwent region knew full well of the wealth of talent in the area and the capabilities of the coaching and management team.
"The Dragons region has the biggest and best community rugby development team in Wales, which continues to have a major impact on the youngsters at more than 110 schools in the south-east Wales area.
"It has been a difficult and well documented transition period from last season's club based set-up in Wales to the new regional concept, but I firmly believe that we have turned the corner in Gwent.
"The old Newport die-hard fans are beginning to transfer their support and loyalty to the Dragons and I hope that the signing of Bobby Skinstad will give them something extra to shout about.
"The rugby fans in this part of Wales are among the best in the world and we need them all to give their total commitment to Andy Marinos and his team to help make them even more successful.
"The board of directors, chaired by the chairman of the Welsh Rugby Union, David Pickering, are united in their determination to turn the Dragons into one of the top sides in Europe. Hard decisions have already had to be taken since the regional side was created last summer and the board will not shirk from more of the same.
"But today's decision will hopefully convince everyone that the Dragons are here to stay in Newport and that the club has the guidance and ambition to become even more competitive and successful in Europe and the Celtic League."
Skinstad will not be eligible to play for the Dragons in their final two Heineken Cup Pool matches against Leicester Tigers (at Rodney Parade on Saturday, 24 January, kick-off 5.00pm) and Ulster (at Ravenhill on Friday, 30 January, kick-off 7.30pm). If the Dragons qualify for the quarter-finals, then Skinstad can be registered to play as one of two extra signings for the knock-out phase.
He will be in line to make his Dragons debut in the home Celtic League match against Leinster Lions at Rodney Parade on Friday, 6 February (kick-off 7.05pm). The Dragons currently lie in third place in the Celtic League after 10 matches and have 12 to go before the season ends.
Dragons skipper Andy Marinos played alongside Skinstad for both Western province and the Western Stormers between 1997-99 and is looking forward to teaming up with him again.
"Bobby is a supreme player. The best way to describe him is to call him a white Fijian," said Welsh international Marinos.
"He has all the skill and flair of the Fijians, but he also has the hard nosed approach of the South African forwards. He has played at the very highest level and is still considered to be a world class performer."Every member of the Dragons squad is looking forward to playing with Bobby. We've got a lot to offer him and he has got a lot to give back in return."