The 18-year-old midfielder was reported to be heading to Fratton Park in a £1.2million deal.
But the France Under-18 captain has opted for the promise of first-team football at Southampton, signing a four-year contract for a fee that could rise to £1.18million.
Schneiderlin told the club's official website: "I am delighted to be signing for Southampton. It is a very good club and one where I know I will get a chance to play.
"That is the most important thing for me right now. There were other clubs interested in me but I know Southampton have a good track record for bringing through youngsters."