The striker has agreed to join the Saints on loan until the end of the season as Shelbourne seek to ease club's financial burden
Hughes, 31, joined Shels in 2011 and enjoyed two fruitful seasons at Tolka Park, winning the club's Players' Player of the Year award in 2011 and finishing the 2012 season as the club's leading goalscorer.
A League of Ireland journeyman, the former Dundalk, Monaghan United and Kildare County attacker arrives at Richmond Park for his second spell with league-leaders St Patrick's Athletic, having previously played for the club over 10 years ago.
Hughes rejoins St Pat's having failed to score for Shelbourne this season as the Reds struggle at the foot of the Airtricity Premier Division table. A statement released on Shelbourne's official website suggested that the loan move arose out of "tight budgetary constraints".
"As manager Johnny McDonnell prepares to put his stamp on things at Tolka Park under tight budgetary constraints, it has been announced today that Philly Hughes is to go on loan to St Patrick's Athletic until the end of the season," said the statement.
"Everyone at Shelbourne would like to thank Philly for his efforts on behalf of the Real Reds over the past two and a half seasons and wishes him all the best in his temporary move to Inchicore, hoping that he can rediscover his goal scoring habit during his stay there."
Meanwhile, title-chasing Derry City have completed the signings of David McDaid, Eugene Ferry and Dean Jarvis.
Goalkeeper Eugene Ferry rejoins the Candystripes after departing at the beginning of the 2013 season, while McDaid returns to the club after a six-month spell with York City was cut short by mutual consent.
Derry-born Jarvis, 21, is a former Northern Ireland youth international and joins the club from IFA Championship side Insitute having previously played with Scottish Premier League outfit Aberdeen.