Although he initially signed his loan deal with the club under the management of Ian Holloway, new manager Tony Pulis acted quickly to express his interest in making Jason Puncheon's loan move permanent.
The transfer means that Crystal Palace now have space for another domestic loan, expected to the arrival of Tom Ince on loan from Championship side Blackpool.
The deal for Jason Puncheon is estimated to be worth in the region of £1.8m to Southampton.
Puncheon, 27, joined Southampton from Plymouth Argyle for a fee of £400k back in 2010.
The former MK Dons loanee fell out of favour at Southampton after a bust-up with executive chairman Nicola Cortese that saw him sidelined for the majority of the 2010/11 and 2011/12 seasons.
Puncheon was allowed to return to the first team set-up following a formal apology. He proved invaluable in the Saints' first season back in the Premier League, after a seven-year absence.
Puncheon scored 7 goals in 34 games last season for bosses Nigel Adkins and Mauricio Pochettino. As a result, he earned himself a new contract with the south coast club.
For personal circumstances, Puncheon was permitted to join up with Crystal Palace on August 21st 2013, with Southampton boss Pochettino going on record to state that he would have liked to keep Puncheon at the club.
Commenting on his move on social networking site Twitter, Puncheon posted:
'Sad to leave some good people behind ❤ time for a fresh start...what can I say had a up and down time but finished on a high always better to be remembered for something than nothing....St Mary's will always remember he s**** when he wants!!'
image: © joncandy