2006 was the club’s second season back in the State competitions. John Anastasiadis was the coach, and Dean Anastasiadis was the captain.
The season started on a positive, with a 2-0 win against Heidelberg at the Village, the team however would then experience a tough patch of form with only two more wins over the next couple of months.
In the midseason though South would lift their form and posted 5 wins in 7 games, including a 7-0 win against the Melbourne Knights. This set up South well and they would eventually finish in 3rd place and qualify for the finals.
In the Elimination Final, South defeated Green Gully 3-0. In the Semi-Final, South defeated Altona Magic 2-1 (with 2 goals to De Nittis). Altona however had a second chance, and defeated Heidelberg in a Preliminary Final to qualifying for the Grand Final.
Over 5,000 people headed to Lakeside (then Bob Jane Stadium) for the Grand Final, where they saw De Nittis score at the 63rd minute to hand South a 1-0 win and their first State League title in decades!
Fernando De Moraes was South’s top scorer for the season with 12 goals.

| Team | Pts |
| Oakleigh | 55 |
| Altona Magic | 43 |
| South Melbourne | 42 |
| Heidelberg | 41 |
| Kingston City | 38 |
| Green Gully | 37 |
| Preston | 37 |
| Richmond | 35 |
| Bulleen Zebras | 33 |
| Fawkner-Whittlesea | 31 |
| Melbourne Knights | 30 |
| Sunshine George Cross | 30 |
| Essendon Royals | 29 |
| Frankston Pines | 23 |

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