Panesar is currently in South Africa playing for Highveld Lions
Spin bowler Monty Panesar has agreed to join Sussex on a three-year contract after Northants said the England player cost too much to keep.
The 27-year-old left-armer, who took just 18 County Championship wickets for Northants last season, was given permission to talk to other counties.
Northants coach David Capel told BBC Sussex: "We can't say finance wasn't a contributing factor because it was.
"It would have been a considerable hit (to keep Panesar)."
Capel added: "We had things in place ready for last season for example where we budgeted for him to play only three of four games.
"Suddenly then Monty is out of a central contract. That leaves a problem finding finance for him and finding the right type of cricket for him."
Panesar, who is currently playing in South African domestic cricket for Highveld Lions, has taken 126 wickets in 34 Test appearances for England.
Panesar was too expensive to keep - Northants coach David Capel
He said: "Success in this new challenge with Sussex can only improve my chances of reclaiming my place with England, which is the pinnacle for any player."
He has been overlooked by the selectors since the opening match of the summer Ashes series against Australia, when his batting helped salvage a draw for England in Cardiff.
That apart, the 2009 season was the low point of his career as his 18 Championship wickets came at a cost of almost 60 runs each, while he was left out of Northants team for the final game, and also lost his England central contract.
Sussex will play Northants in Division Two next summer following their relegation and are hoping Panesar can play a leading role in an immediate return to the top flight.
Manager Mark Robinson said: "His career has stalled, that's the best way of describing it.
"He's in the mental cycle which happens to a lot of sportsmen.
"Monty went from playing for Loughborough University to the England team almost overnight.
"At some point in everybody's career there is a stop - you hit the wall - but it's what you do after that.
"We are hoping to be beneficiaries of Monty making his way back up.
"It is testament to the club that we are able to attract a player of Monty's calibre and I am sure he will play a key part in helping us achieve our aims for the coming season."
Panesar added: "I am grateful to Northamptonshire for all their support in my career so far and for allowing me to make this move.
"I know Michael Yardy well from rooming with him on tour, so I am really looking forward to working under his captaincy, and with the coaching staff at Hove, to help the club reclaim its Division One status and maintain its premier position in the shorter forms of the game."
Sussex have not had a senior front-line spin bowler as a full-time member of the playing staff since Mushtaq Ahmed left at the end of the 2008 season.
Last summer, Piyush Chawla took 36 wickets in six Championship games, but the Indian leg-spinner has joined Surrey for the 2010 campaign.
Mushtaq (left) worked with Panesar earlier this year
However, Mushtaq has already worked with Panesar in his role as England's spin bowling coach - and will renew the relationship at county level while he continues as Sussex's part-time spin coach.
Robinson continued: "We want to get Monty back doing what he does best - loving the game, loving bowling and loving practising.
"We want him to be loved and we have got Mushtaq working with us a little bit, who is anything but a technical coach, to preach the love of the game and use of the imagination.
"People forget Monty is the sixth-best left-arm spinner of all time for England but he is being beaten up as if he wasn't.
"You don't get as many international wickets as him without being a good bowler.
"Every signing comes with a risk but we back our environment to get the best out of him.
"Any sportsman responds to a workplace where you feel valued and we feel we can give Monty that belief again."
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