The 30-year-old winger wants to force his way back into the New Zealand side after frustrating spells on the sidelines through illness and, more recently, a shoulder injury after playing in Martin Johnson's testimonial.
Lomu missed the chance to play in New Zealand's National Provincial Championship for North Harbour, and will now play for his new side in Celtic League, European Cup and Powergen Cup fixtures.
Lomu is now eagerly anticipating his club debut - expected to be early in December - in a country looking to build on this year's success in the RBS 6 Nations.
"I look forward to joining the Blues later this year and to getting back on the rugby field," he said. "It's a really exciting time to be involved in Welsh rugby.
"They are enjoying a real resurgence in the world game and as a country it shares the same passion and love for the sport that New Zealand does. I have always felt such great warmth from the Welsh."
He added: "The shoulder injury I incurred during the match in June took me out of the NPC season in New Zealand.
"My timed return to the game is New Zealand's off season so the opportunity with the Cardiff Blues suits perfectly."
Lomu has hopes of playing for the All Blacks at the World Cup in 2007, and Blues officials are pleased he chose Cardiff as he attempts to regain the fitness and form which made him such a devastating player when he burst onto the scene a decade ago.
Blues chief executive Robert Norster added: "Jonah is obviously a fantastic player and a massive addition to any side.
"The Cardiff Blues had a number of rivals for his signature but I think it shows our ambition and also reflects well on the progress of our national game that he has decided to play for us as he continues to rebuild his very impressive rugby career."
Lomu had a kidney transplant last year after suffering for more than a decade with nephritic syndrome and has not played for the All Blacks since 2002.
But the star of the 1995 and 1999 World Cups is now well on his way to recovery and his move to Wales illustrates his desire to get back into international rugby.
Prior to signing he told Radio Sport: "We've exhausted all other avenues in New Zealand. I've got to get rugby in and this is the only way I can do it.
"It is a big commitment but it also shows that I'm willing to go to those lengths to get to where I want to be (playing for the All Blacks).
"The health is great; it's the least of my worries. My shoulder is doing really, really well. I saw the surgeon two days ago and he's very pleased with where it's at."