The 27-year-old will move to Christchurch at the end of this year's National Provincial Championship competition and will be available for selection by the Crusaders in next year's Super 14.
Canterbury have been in the market for a new scrum-half since veteran Justin Marshall headed to Guiness Premiership club Leeds after New Zealand's series against the British & Irish Lions.
Canterbury RFU chief executive Hamish Riach said he was pleased that negotiations with Senio had been completed.
"Kevin is a very good player as shown by his elevation to the All Blacks this year. We are very much looking forward to his contribution to Canterbury rugby."
Senio, who made his debut for the All Blacks during the Tri-Nations, said it had been an incredibly tough decision to leave the Bay of Plenty.
"I'm excited about the opportunities presented by Canterbury, but I want to thank the Bay for being so supportive of me over the last three years."
Bay of Plenty chairman Stuart Harvey was disappointed to see the All Blacks scrum-half heading south.
"We have done everything we could and given him our best offer," he told Radio Sport. "Two weeks ago he told us he was staying but that has obviously changed now."