Barrett, the 73-test All Black first five-eighths, is ending an eight-year association with the Hurricanes to join the Blues as part of a new four-year deal with New Zealand Rugby that will take him through till the 2023 World Cup.
Blues chief executive Michael Redman said the signing coup had been "years in the making" and was the most important player change the competition had ever seen.
"While Beauden's personal circumstances created this opportunity, changes we've made to our club in recent years meant for the first time the Blues were a credible option for him. The process has been long and complex, but we believe the outcome is the most influential player movement in Super Rugby history," he said.
Barrett's move north to his wife's home town has been speculated for some time, but still comes as a surprise after the 28-year-old had played all his Super Rugby with the Hurricanes – the franchise his father, Kevin 'Smiley' Barrett appeared for early in professional rugby, from 1997-99.
A NZ Rugby announcement confirmed Barrett would change franchises in a deal that includes two other notable clauses.
The two-time World Rugby player of the year will take an extended break from the game after this year's World Cup and will not join the Blues until midway through next year's Super Rugby competition. That's something Blues coach Leon MacDonald said he was happy to live with.
There is also provision in the new deal for Barrett to take a "short" sabbatical in Japan. The terms of that, the announcement said, would be negotiated with NZ Rugby and the Blues.
"This is obviously a massive decision for me and my wife Hannah and we're really looking forward to the next chapter of our lives," Barrett said in the official release.
"The Hurricanes will always be a huge part of who I am. The Hurricanes environment and style of rugby they play has helped me become the player I am today, and I'll be leaving some very good mates.
"Wellington has been my rugby base for many years and university base for Hannah and we'll always have fond memories of living there. Home for us now is Taranaki and Auckland and home and family are immensely important to both of us."
Barrett has played 125 matches for the Hurricanes since making his debut in 2011 and led them to the Super Rugby championship in 2016. He formed a potent halves partnership with longtime team-mate TJ Perenara.
But now he takes on arguably the biggest challenge in the New Zealand game – the reins of the under-performing Blues who have not made it to Super Rugby's post-season since 2011 and are perennial Kiwi wooden-spooners in the franchise competition.
"I'm enthusiastic about the new challenge I'll get with the Blues over the next four years," added Barrett. "They're a team on the rise, I like the way they play and I'm really looking forward to being a part of that."
Blues coach MacDonald said Barrett's signing was a significant move for the organisation.
"It's huge for our club. As well as getting a world-class player, our young first fives will flourish with the opportunity to train and play alongside Beauden, and I am sure he will be an immediate fan favourite at Eden Park.
"We are happy to work with Beauden and New Zealand Rugby on the options he has negotiated for an extended break at the end of the year and potential offshore playing opportunity. He has earned that right," added MacDonald.
Hurricanes chief Executive Avan Lee said while the franchise was disappointed to lose a player of Barrett's standing, they supported his final decision.
"Given the flexibility that is being afforded our top players ... we hoped that Beauden's long and distinguished career would continue at the Hurricanes," said Lee.
"The process has been challenging but we sincerely thank him for everything he has done for the Hurricanes. He has been a great ambassador for our club and we wish him well.
"Beauden has made it clear that his decision to leave the Hurricanes were for non-rugby reasons and we respect that. He leaves us as someone who has made a contribution few can compare to and we thank him for that."
Barrett broke into provincial rugby for Taranaki (then a Hurricanes affiliate) in 2010 and made his Hurricanes debut a year later.
He scored 1238 points over his 125 matches for the Hurricanes.
Barrett's move to play for the Blues is in contrast to All Blacks predecessor Dan Carter's decision to remain with the Crusaders despite moving to Auckland with his family in the latter years of his Super Rugby career.
Carter commuted to Christchurch for the Super Rugby season.
Barrett's signing potentially lifts the Blues from perennial pretenders to championship contenders. The struggling outfit have finished bottom of the New Zealand conference for the last six seasons and have clearly lacked an elite playmaker to run an otherwise potent backline.
Barrett's inclusion should now add the direction, running threat and kicking game that has been badly missing at 10, though his late arrival for next season will create its own issues.
With the older Barrett brother's playing future now decided, the focus will now go on younger sibling Jordie's future at the Hurricanes.
The All Blacks utility back has been linked to a switch to the Crusaders to join older brother Scott, a lock who is also part of the national setup.
Jordie Barrett, 22, joined the Canterbury rugby academy after leaving school and made his Canterbury debut in 2016.
But he signed for the Hurricanes in 2017, stating a desire to play alongside Beauden.
Beauden Barrett's Blues move adds to a worrying Hurricanes' player drain.
Coach John Plumtree had already lost ex-All Blacks Nehe Milner-Skudder, Matt Proctor and Jeffery Toomaga-Allen and lock Sam Lousi to European clubs, while halfback Finlay Christie is also heading north to the Blues.