The Magpies gave up pick 34 in this year's draft and a future first-round selection to get the deal over the line.
Schultz spent five seasons with the Dockers and enjoyed a career-best campaign in 2023, kicking 33 goals from 23 games.
The 25-year-old stunned Fremantle with a trade request last week, citing family reasons for his desire to move to Victoria.
Moama Magpie turned Collingwood Magpie, Lachie Schultz will wear black and white in 2024!— Collingwood FC (@CollingwoodFC) Show him some love, Magpie Army 💬⬇� pic.twitter.com/uFiUN0KhIyOctober 16, 2023
"I'd like to thank Fremantle for my time at the club and for coming to an arrangement with Collingwood," Schultz said in a statement.
"The Dockers gave me my first football opportunity and I will be forever grateful for my time there.
"I would not be the player I am today without the support of the football staff and players.
"Family is important to me and is one of the reasons I have decided to make the move back to Victoria."
While Schultz got his trade wish on Monday, Melbourne emphatically ruled out Harrison Petty swapping clubs despite strong interest from Adelaide.
Harrison Petty will be staying with the Demons in 2024 after Melbourne ruled out a possible trade.
List boss Tim Lamb declared the 23-year-old swingman will remain with the Demons, where he is contracted for a further two seasons.
"One hundred per cent. That's 100 per cent," Lamb told Trade Radio on Monday.
Petty will become a free agent at the end of 2025 but Melbourne hope to keep him beyond the end of the existing deal.
"We've had a number of chats with Harrison and we understand Harrison's a real good player," Lamb said.
"That's why Adelaide would like to get him and it's why we're keeping him.
"We'll work to hopefully not having him only for the next two years but an extended period after that."
Petty featured in Melbourne's drought-breaking 2021 premiership as a defender but spent plenty of time as a forward this year, kicking a career-best six goals in round 20.
The Demons are searching for more potency in attack and will look to settle Petty next to emerging key forward Jacob van Rooyen.
"We're really excited about that partnership," Lamb said.
"What we saw from it this year was really good and they clicked together well. That's where he'll be playing for us."
The Demons and the Crows remain locked in negotiations over a deal for Shane McAdam.
Melbourne and Adelaide remain locked in negotiations over a deal for Shane McAdam, who has requested a trade to the Demons.
Melbourne have offered the Crows a future second-round draft pick in exchange for the 28-year-old, 50-game forward.
"We think that's a really fair offer and that it gets it done," Lamb said.
Lamb confirmed Jake Melksham will play on with Melbourne in 2024 despite a serious knee injury that will sideline him for most of the season.
Melksham ruptured an anterior cruciate ligament in August, in an incident that initially put the 221-game veteran's playing future in doubt.
"Jake will be at the club next year," Lamb said.
"We are just looking at what his deal looks like. We think he will be back earlier than people think."
Bigoa Nyuon (centre) has joined North Melbourne from Richmond.
North Melbourne have secured Richmond's Bigoa Nyuon, giving up pick 65 for the versatile tall.
Nyuon played one game for the Tigers during his four seasons at Punt Road.
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