Seip has been on the transfer list at Home Park since a bust-up with former manager Paul Sturrock during the early weeks of the season.
He subsequently spent two months on loan at Blackpool and scored for Ian Holloway's side in a 3-0 victory over the Blades.
The Dutchman will now move to Bramall Lane on New Year's Day and will be eligible for Sunday's FA Cup third round tie against Queens Park Rangers.
The 27-year-old will initially stay with the Blades until May 2, but that deal can be extended if the club reach the Championship play-offs.
Blades boss Kevin Blackwell has been looking to improve his defensive options after loan duo Andrew Davies and Toni Kallio returned to parent clubs Stoke City and Fulham respectively.
Davies is still a target for Blackwell, while Seip's signing could further fuel rumours that Matthew Kigallon will be sold during the January transfer window.
Sporting Life