Richardson, along with coach John Lang, turned the Panthers into a premiership winning force within just two seasons and it was expected he would stay at the club for an extended period.
Richardson has, at a number of points throughout the past 18 months, declared that he was aiming to create the most successful club in the world � both on and off the field.
After tonight�s decision, it appears he will try to do that at South Sydney.
�I have had a great time at Penrith,� Mr Richardson said today. It�s a great club with great players and great fans. I am just moving onto another challenge.�
The Rabbitohs have confirmed Richardson�s appointment and say that current CEO David Tapp has been offered another role within the club.
Richardson�s decision to leave has been met with anger by a number of Penrith fans, who believe his loyalty has been seriously questioned.
�As a matter of fact I'm absolutely filthy with his decision. It could not have come at a worse time,� one fan said on the club�s official website.
�I respect what Richo has done for this club and I don't have a problem in the world with people following opportunities etc but I think this is very unprofessional,� another said.
It has not yet been confirmed by the Panthers when Richardson�s departure takes place. But it is not expected he will remain at the club beyond this weekend�s match with Manly.
Panthers Group CEO Roger Cowan, who according to sources was shocked at the decision by Richardson, says it is a shame to see the man who helped create a winning football team leave.
�Shane has been very good for this club � last year�s premiership and this year�s success are just two examples of that,� Mr Cowan said.
Penrith are yet to announce Richardson�s replacement.