Moving back to the top-flight
The 24-year-old has been touted as one of the country's brightest talents, and impressed many when he made the move from Tottenham Hotspur to Newcastle United.
He spent the second half of last season with the Magpies and, despite scoring four times in 13 appearances, he failed to help the North East club survive relegation.
Palace striker, Dwight Gayle went in the opposite direction for around £10m, but Townsend shared his delight on his return to the capital.
He told cpfc.co.uk that he was "extremely delighted" to make the move and spoke to both the "manager" and "chairman" before he "signed", adding that he was "pleased" to be part of "Crystal Palace's future".
Townsend continued, saying that he believes "by the sound of things" that the future of the club is going to be a "bright one" and that he "cant wait to get started".
Chairman Steve Parish, shared his delight at the move saying that it is "fantastic" that they have "managed to get a player" of "Andros' quality" into the club.
He believe that Townsend is a "another exciting attacking talent" that the club have added to their "ranks" and said he "cant wait" to see him in a "red and blue shirt" in the "very near future".
Gayle has gone the opposite way to Townsend, with their top scorer for the past three seasons moving to St James' Park. He shared his delight at making the move.
Gayle told nufc TV that if someone had told him that he would be signing for the Magpies that he would have "laughed", but admitted that it is a "great achievement" and wants to "crack on" and help push the club "back up".
Gayle said he is "ecstatic" to be at a "big club" like Newcastle and it is "dream come true" and it is "amazing" to be at a club with a "massive fanbase" and "great history".
Crystal Palace will take on West Brom at Selhurst Park on Saturday, August 13 with kick-off at 3pm BST.