Having missed most of South Africa's home season due to injury, the 34-year-old will hope to be available for Hampshire in two windows - firstly for a 50-over match and a County Championship fixture in June before at the back-end of the season after the conclusion of his country's tour to Sri Lanka in July.
Reflecting on Steyn's appointment, Giles White, Hampshire's director of cricket, said that the South African is one of the best bowlers in the world and that the club is looking forward to help him in his bid to return to full fitness.
"Dale is one of the best bowlers in the world and is extremely motivated to get going after a frustrating period on the sidelines.It seems a great fit for both parties - we hope that we can help him get back to his best and we look forward to welcoming him to Hampshire," ESPNcricinfo quoted White as saying.
Steyn, who was awarded a new national contract by the South African board recently, has committed himself to returning to international cricket.
However, he has only played one Test match since November 2016, when he broke a bone in his shoulder at the WACA.
Steyn made a Test return during the match against India in Newlands, Cape Town in January.He bowled just 17.3 overs before leaving the field with a heel injury.
Steyn was earlier due to play for the Titans in the first-class competition in March and also targeted the final round of franchise matches, beginning March 22, to test his fitness.However, he eventually pulled out of the fixtures.
Steyn is just two wickets short of Shaun Pollock's South African Test record of 421 wickets.