The 24-year-old, who was raised in Manchester after his rugby league professional father Charlie joined Oldham, will return to the region on a two-year contract.
"I want to go overseas and experience a different lifestyle," said McAlister.
"You only get one shot at it and I want to make the most of my career. I have lived in Manchester before and liked it."
McAlister, who can play at fly-half, centre or full-back, spent 10 years in the north-west, featuring for Lancashire schoolboys at rugby league and at football, also joining Manchester United's academy.
McAlister has the option of a third year at Edgeley Park but could return to New Zealand ahead of the 2011 Rugby World Cup finals.
His place in the Blues Super 14 squad will be taken by All Blacks team-mate Nick Evans.
The Aucklander has also returned to familiar territory, ending a three-season tenure with Otago and the Highlanders.
"It's exciting for me," said Evans, who can play at fly-half or full-back.
"This is the next step in my career and I am looking forward to a new opportunity - playing amongst a new group of guys in a new squad."
Evans made his representative debut in 2001 for North Harbour, where he was replaced by McAlister.
In 2004, he made his first Super 12 appearance and was selected for the All Blacks that same year.