Dunkley's future had been up in the air since the Bulldogs crashed out to Fremantle in the first week of the AFL finals.
The 25-year-old's bid to join Essendon last year fell through, but he is now out of contract and has officially told the Dogs he wants to join the Lions for what's reported to be a six-year deal.
It's believed the Bulldogs had offered Dunkley a five-year extension in a bid to keep him.
Port Adelaide were also in the hunt to secure Dunkley's services.
Dunkley's partner, Tippah Dwan, plays professional netball for the Adelaide Thunderbirds in what loomed as a potential advantage for the Power.
"Josh has been weighing up this decision for some time and this news is obviously disappointing for the club," Bulldogs list and recruiting boss Sam Power said.
"We believe Josh is at the peak of his powers in a football sense having had a career-best season in 2022, averaging 25 disposals and kicking 18 goals across the campaign.
"The club was clearly intent on Josh staying with the Bulldogs, having tabled an attractive contract offer for him to continue with us for the long term."
Brisbane will now need to weave some magic on the trade front in order to satisfy the Bulldogs.
Complicating matters is the Lions are committed to taking star father-son prospect Will Ashcroft.
Ashcroft, son of three-time Brisbane premiership player Marcus, is regarded as the standout player in this year's trade pool, meaning the Lions are highly likely to need to match a bid at No.1.
It means the Lions, who currently hold pick No.15, might need to offer future draft picks to snare Dunkley, or go into a significant draft points deficit.
Dunkley's impending arrival at Brisbane will add further potency to a midfield already featuring Brownlow medallist Lachie Neale, captain Dayne Zorko, and emerging stars Jarrod Berry and Zac Bailey.
Meanwhile, North Melbourne have received an assistance package from the AFL with the 2022 wooden-spooners given two future draft picks.
But the Kangaroos will have to trade their 2023 second and third-round picks, with the selections not transferable if they aren't shifted to another club for other assets.
It means the league is looking for North to bring in experienced talent to boost their cause, having won just nine games in three years, culminating with this season's disastrous two-win campaign.
The Kangaroos will also have two extra rookie list spots.
