"Anthony (Seibold) has done a great job at our Club over the past two years however his hesitance to extend his contract with us, an offer which has been on the table since June, led the Club to explore other options.
"We're looking forward to Wayne becoming a Rabbitoh in 12 months' time and we wish him the best of luck with the England team in their current Test series with the Kiwis.
Bennett stated he was looking forward to the change and taking over the reigns of the oldest club in the game.
"I'm truly humbled by the opportunity to coach the South Sydney Rabbitohs," Coach Bennett said.
"Souths is one of the iconic clubs in the game. I didn't think I would get this opportunity, but that opportunity has now come for 2020 and 2021."
The Australian's Brent Read first reported the Bunnies' dramatic powerplay, claiming the swap could happen as early as the 2019 season.
That means Bennett and Seibold could still move clubs before the start of pre-season training just weeks away.
The development has huge implications for the rest of the competition, with the NRL coaching landscape for 2019 beginning to take shape.
Seibold's reported decision to knock the Rabbitohs back triggered immediate moves.
Channel 9 reported on Wednesday night that the Rabbitohs had offered Seibold a revised contract a few weeks ago but were yet to receive a response. That report was confirmed by the Rabbitohs in their statement.
Seibold last week interviewed for the Brisbane job which is vacant from 2020 after the Broncos board decided not to renew Bennett's contract.
The Rabbitohs reportedly recently bumped up their offer to Seibold but took the offer off the table after he informed the club his preference is to sign with the Broncos.
It was reported that the Rabbitohs would be comfortable letting Seibold leave immediately because they had former assistant coach David Furner ready to step in.
However, the former Raiders mentor remains contracted with Super League club Leeds and would need to get out of his three-year-contract with the England club to return to the Rabbitohs.
That now appears to have been the Rabbitohs Plan B, with the club identifying Bennett as Seibold's replacement.
Bennett's decision means he has knocked back the Wests Tigers, who are now widely-tipped to officially offer their coaching position to former Rabbitohs premiership coach Michael Maguire.
Maguire had been linked with Manly, Brisbane and the Tigers, but with Seibold likely at Brisbane and Des Hasler appointed to coach Manly, Wests Tigers are his only option.
The Tigers have held coach Ivan Cleary to his long-term contracted, but he is now expected to be released to join the Panthers, where he will link up with son Nathan.
Panthers coach Cameron Ciraldo is expected to remain as a senior assistant coach.
Meanwhile, an official decision on Bennett's successor is likely to be made at next Tuesday's Broncos board meeting, with Seibold reportedly told he is the club's preferred candidate.
