The County had offered Stone a new contract and hoped to persuade him to stay with their pitch revolving around the fact that he would get more playing time with them.
But Stone, who is currently on the comeback trail after suffering a serious knee ligament injury in June, has opted to make the move to Edgbaston.
The 22-year-old picked up the problem while celebrating a wicket in the Steelbacks’ win against Worcestershire at the County Ground and will not play again this season.
Stone played in three County Championship Division Two matches during the current campaign, taking six wickets, while he claimed three in the NatWest T20 Blast.
And he is now looking forward to a fresh start at Warwickshire.
“I am very excited and honoured to be joining Warwickshire CCC,” Stone said.
“I had a few other options but after meeting the coaching staff, the captain and seeing the world class facilities at Edgbaston the choice was simple for me. “I have a burning ambition to play at the highest level and win trophies. I feel Warwickshire is the best place for me as their ambitions match mine.
“It’s going to be a huge challenge and I can’t wait to start.
“I want to thank Northamptonshire CCC for all they have done for me. The club and the fans are first class and I wish them all the best for the future.
“It’s been a very tough decision to leave but the opportunity I have now is something i couldn’t turn down.”
Northants had been hopeful of persuading Stone to stay.
After Friday’s defeat to Yorkshire Vikings, head coach David Ripley said: “We had our chat with Olly and he listened to what everyone had to say.
“He’s not playing any cricket, there’s nothing to get in the way and he’s just got to work out where he sees himself best.
“We feel quite strongly that’s with us, given he is injured. That’s our biggest card to play.
“He’s got an injury and you don’t want to be in a changing room proving yourself in front of new people with a niggle and putting yourself under pressure.
“In our opinion, he’s better off being here with people who will support him and can handle his rehab.
“He wouldn’t be under the pump to hit the ground running next April. If it took him until May to get going, so what?
“We all know him and that’s our pitch. I hope he sees it the same way.”
However, Stone opted not to stay on at the County Ground and will now make the move to Edgbaston.
“Olly is a very exciting cricketer who has bowled some superb, hostile spells and has quickly established himself as one of the best young bowlers in the domestic game,” said Warwickshire director of cricket Dougie Brown.
“We knew that there were a number of counties in for Olly and we are delighted that he has chosen to join Warwickshire to continue his development in the game.
“He has a very big future ahead of him and we look forward to welcoming him in to the squad when pre-season training begins in November ahead of the 2017 season.”