The former Western Sydney and Melbourne City schemer spent last season on loan with the Terriers after signing for Manchester City last July.
Huddersfield are believed to have paid an up-front fee in the region of STG12 million ($20 million) for Mooy’s services, with that figure to rise due to rise with add-ons inserted into the contract by City.
It makes the 27-year-old the most expensive Australian footballer ever, eclipsing the STG5.75million ($9.75m) Newcastle paid Middlesbrough for Mark Viduka in 2009.
Mooy has agreed terms on a three-year deal and said he is delighted to commit his future to the club where he enjoyed a fairytale run to the Premier League after beating Reading in the play-off final at Wembley last month.
He has thrived under the coaching of German manager David Wagner and said that was a huge reason for his decision to stay in west Yorkshire.
“Playing for Huddersfield has been a fantastic experience this year and thanks to the fans, David, the owner Dean and all the team, I’ve grown to feel part of the Terriers family,” he said.
“Now we’re in the Premier League, not only do I get to play at the highest level of football, but I continue to be part of a team that achieved something special and we will continue on that journey together to try and achieve much more.
“I’d like to thank my former club, Manchester City, for the support throughout my time in the Championship and during my transition to Huddersfield.”
Mooy’s first game will be away to Crystal Palace on August 13.
Help our journalists uncover the facts
In times like these InDaily provides valuable, local independent journalism in South Australia. As a news organisation it offers an alternative to The Advertiser, a different voice and a closer look at what is happening in our city and state for free. Any contribution to help fund our work is appreciated. Please click below to donate to InDaily.