The 26-year-old will return home from Australia and join Ulster for next season, replacing London Irish-bound Tom Court.
The Leinster Academy and Ireland Under-20s graduate's homecoming is another boost for the IRFU in keeping Irish stars on home shores.
Sean O'Brien and Jamie Heaslip's decisions to reject strong big-money offers from France's Top 14 to stay with Leinster underline the IRFU's determination to keep as many home grown stars in Ireland as possible.
Conor Murray and Paul O'Connell also re-signed with Munster and Rory Best committed to Ulster, leaving Johnny Sexton Ireland's sole frontline exile, at Racing Metro.
Murphy's move to Ulster will allow Ireland head coach Joe Schmidt to take a close look at the Dublin-born front-rower.
"When I was deciding my future, it came down to joining Ulster or staying with the Brumbies," said Murphy.
"The Brumbies are a fantastic franchise and Canberra is a brilliant place to live, but I am Irish, I have an Irish family and I have always had the urge to return to Ireland one day and to play my rugby back home.
"Ulster are a quality team: they are currently one of the leading sides in Europe and their fans are famous around the world.
"I spoke to [Ulster rugby director] David Humphreys about the vision that he has for Ulster - he has huge ambition and big aims for the team.
That is exciting and I hope that I can play a part in bringing those aims to reality."
Boss Humphreys hailed the signing, backing Murphy to beef up Ulster's pack next season.
"Ruaidhri is a highly talented young Irish prop whose experience of Super Rugby will bring an extra dimension to our front row next season," he said.
"I am delighted that he is joining us and I have no doubt that he will be a huge success at Ravenhill in the coming years."