The 20-year old won the Championship last season with the Victory but has decided to return home.
The news was made public months ago but it is only now that the contract has been signed and he has been officially unveiled as a Sydney FC player.
"I'm very grateful for the opportunity Melbourne gave me but I've always wanted to play for my home town, so I'm very happy to be back," he said.
"I must confess when I was younger I used to go and watch (Sydney) and I was even in the Cove when they won the Grand Final against the Central Coast, so I was a fan before I went to Melbourne and it's exciting to be part of the team.
"I can't wait for the start of training," Ryall added.
"We have a good squad with a mix of youth and experience, a new coach and the club is working hard to create a winning culture so I'm sure we'll have a good year."
The Qantas Young Socceroo has signed with the Sky Blues for the next two seasons.