Southward has been signed to a future contract by the Panthers, Bryan Strickland of Panthers.com reports.
Southward ended the 2016 season as a member of Carolina's practice squad, and the former third-rounder will have a shot at making the active roster throughout the upcoming offseason.
The young safety went through training camp with the Colts in August, but a knee injury landed him on IR and ultimately led to him being released with an injury settlement. He hadn't latched on with any other team this season until the Panthers added him to round out their practice squad after adding a pair of players to the active roster Tuesday.
Southward (undisclosed) reached an injury settlement with the Colts on Wednesday, Jayson Braddock of SportsTalk 790 reports.
Southward had knee surgery in late May and landed on the team's injured reserve list last week. He's now eligible to sign a deal with another team.
The specifics of his ailment remain undisclosed. However, Southward will now miss the entire 2016 campaign.