The 25-year-old has signed on a season long loan deal from Leicester City.
As Leicester were promoted to the Premier League and the Blades went down, Souttar has stayed put in the Championship.
"Getting someone of Harry's caliber and experience is a huge plus, and he'll add some steel to our defensive unit," said United boss Chris Wilder.
"His height and power are exactly what we've been looking for since we lost a couple of experienced heads, but with the loan market we have had to bide our time a little in order to get him here."
"I spoke to the gaffer a few times, but he didn't have to sell the club to me at all," Souttar said.
"I've known some of the lads here and know about the club's ethos and vision. I feel this will be a great partnership at this stage of my career and I am raring to go."