The 35-year-old represented DSG in last season's SA20, scoring 233 runs at an average of 46.60 and a strike rate of 118.87 in eight games, but was released ahead of the mega auction in September.
Williamson recently announced his retirement from international T20s but will continue to explore opportunities in franchise leagues having already played in the T20 Blast and the Hundred earlier this year.
Last month, he was appointed Lucknow Super Giants' (LSG) strategic advisor in the IPL.
Williamson will join Afghanistan spinner Noor Ahmad, West Indies all-rounder Sunil Narine, England wicketkeeper-batter Jos Buttler and former Namibia cricketer David Wiese as the international players in the DSG squad.
The fourth season of the SA20 will kick off on 26 December with the Super Giants taking on defending champions MI Cape Town at Newlands.
Durban's Super Giants squad: Marques Ackerman, David Bedingham, Eathan Bosch, Jos Buttler, Devon Conway, Gerald Coetzee, Tony de Zorzi, Daryn Dupavillon, Dayyaan Galiem, Kane Williamson, Evan Jones, Heinrich Klaasen, Aiden Markram, Sunil Narine, Noor Ahmad, Andile Simelane, David Wiese, Gysbert Wege, Kwena Maphaka
Sunrisers Eastern Cape underlined their status as SA20's dominant force with a nerve-shredding six-wicket victory over Pretoria Capitals at Newlands, clinching a third title in four seasons.
Sunrisers Eastern Cape sailed into yet another SA20 final after beating the Paarl Royals by seven wickets in a low-scoring encounter at the Wanderers on Friday.
Lhuan-dre Pretorius found his form at the perfect moment as Paarl Royals ended Joburg Super Kings' SA20 campaign with a commanding 36-run win at Centurion on Thursday night.
A commanding display from Pretoria Capitals' young stars Dewald Brevis and Bryce Parsons propelled the team into their second SA20 final, as they overcame Sunrisers Eastern Cape by seven wickets at Kingsmead, Durban, on Wednesday night.
