The 34-year-old will be returning to a club where he learned his rugby having played for Cardiff RFC while studying at Cardiff University. He also played for Pontypridd before heading to the Scarlets region in 2009.
He represented Wales at sevens in the 2008-09 season and went on to make 60 appearances for the Scarlets over a five year period. He is currently in his fifth season at the Chiefs and has played 67 times for the club, including coming on as a replacement in last season’s Premiership final.
“I’m really looking forward to going back to a club which pretty much started my professional career. It will always be the place where I fell in love with rugby,” said Welch, who worked with current Blues coach Danny Wilson while he was at Cardiff.
“I lived in Cardiff for 12 years previously, through university and rugby – it’s a city I love and a place where I have a lot of strong ties and family. It’s great to be heading back and I’m really excited about working with Danny again.
“Cardiff Blues are building an exciting and ambitious squad and I’m looking forward to getting back across the bridge to play my part in that.”
The 6ft 6ins lock is the latest signing for the Blues following from Leicester Tigers centre Jack Roberts and Ulster lock Franco van der Merwe.
“Damian is a very athletic second row and a good line-out forward who has gained valuable experienced in the Premiership since leaving Wales. We have identified the second-row as an area we needed to bolster and following the signing of Franco van der Merwe, we feel we have done that,” said Wilson.