Full-back Clyne, who came through the ranks at Selhurst Park and made 193 appearances, agreed a four-year deal with the newly-promoted Saints last week. The clubs have now agreed a compensation fee for the 21-year-old..
The England Under-21 international played for Southampton in last weekend's 1-0 friendly win against Evian, and Saints boss Nigel Adkins said: "Nathaniel has done very well.
"He only had one training session before he joined us, so we're upping the game with him in a way that will make sure he doesn't break down."
Under FIFA rules, Southampton were obliged to pay a compensation fee because of Clyne's age.
"We are very pleased to have worked constructively with Southampton to conclude the deal before it went to a tribunal,'' the Palace co-chairman Steve Parish said.
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