A comprehensive first-principles investigation of chalcogen-hyperdoped silicon is presented, focusing on the microscopic mechanisms driving the insulator-to-metal transition (IMT) and the associated infrared (IR) optical response. Using density functional theory and many-body perturbation theory, the formation energies and statistical probabilities of dopant complexes formed during rapid thermal annealing are analyzed. The dopant diffusion length Λ d is shown to critically influence the distribution of defect types and the IMT threshold concentration x c . In particular, for small diffusion lengths, chalcogen monomers dominate the defect landscape near the IMT, giving rise to distinct IR absorption features. Quasiparticle corrections and dielectric functions are computed for Si:Se and Si:Te, revealing absorption peaks in the short- and mid-wavelength IR regions. These results provide insight into the interplay between defect chemistry and optical properties in hyperdoped semiconductors, with implications for infrared photodetectors and intermediate-band photovoltaics.