The South African had wanted to stay with his Irish province
Former Ulster scrum half Ruan Pienaar will be joining French club Montpellier.
The 33 year old South African has signed a three year deal with the Top 14 side.
Pienaar will face Irish opposition again next season, with Montpellier drawn in the same Champions Cup pool as Leinster.
The highly regarded player had hoped to stay at Ulster while the province were also keen to retain his services beyond last season.
But due to the IRFU's succession policy a new contract could not be agreed, leading to Pienaar's departure.
He had been at Ulster since 2010 and became an integral part of the first team setup during seven years at the province.
Speaking to Montpellier's official website, he said: "I wasn't allowed to stay at Ulster any longer due to the IRFU's rules around foreign players".