Sources have confirmed to RNZ that the former Crusaders star will join the Blues for the Super Rugby Aotearoa competition, which kicks off on Saturday week.
The 38-year-old's signing is expected to be announced at a media session in Auckland at midday.
Dan Carter, a three time world player of the year, left New Zealand rugby after helping guide the All Blacks to a second straight World Cup title in 2015.
Since then he's played in France and Japan.
The first-five joins current All Blacks first-five come fullback Beauden Barrett at the Blues, after the latter left the Hurricanes at the end of last season.