The Bafana Bafana centre-back was unveiled by PAOK on Friday evening and will begin training with his new teammates next week.
Khumalo will be hoping for an injury-free campaign after battling with a succession of niggles in the 2011/12 season, which limited his competitive appearances to just five games for English Championship side Reading.
His position in the national team has come under threat with his former SuperSport United teammate Morgan Gould and Orlando Pirates star Siyabonga Sangweni having emerged as the preferred pairing when fit.
PAOK are looking to bolster their squad after finishing fourth last season – enough to qualify the club for the Uefa Europa League in the coming campaign.
The club have won two Greek Championships in the past – 1975/76 and 1984/85 – but did finish runners-up as recently as 2009/10.
They are currently coached by German-born former Greek international Giorgos Donis.
Olympiacos have been the dominant force in Greece over the last 16 seasons, winning the championship in 14 of those, including last year.
Khumalo is certainly not the first South African defender to play in Greece, both Nasief Morris and Bryce Moon have turned out for Panathinaikos in the past, with the latter also on loan at PAOK.
Dillon Sheppard, Stanton Fredericks, Bally Smart and most recently Calvin Kadi are others to have played in the country.
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