Toulon has confirmed that Milner-Skudder has signed a three year deal and will join them in June.
Milner-Skudder, 27, has played 13 Tests for New Zealand.
Since starring in the All Blacks' World Cup win in 2015, he's struggled with injuries.
The Hurricanes and Manawatu wing-fullback will join compatriots Julian Savea, Malakai Fekitoa and Liam Messam on Toulon's books.
Just when he joins Toulon exactly though depends on whether he makes the All Blacks world cup form, which based on current selections would seem unlikely.
Milner-Skudder was a stand out for the All Blacks at the 2015 World Cup scoring six tries during the the tournament and winning World Rugby's breakthrough player of the year award.
However Toulon would appear to be taking a risk in signing Milner-Skudder given he's had several shoulder injuries which have ruled him out of the game for long periods.
A shoulder injury he suffered in the Japan test in November forced him out of the New Zealand Maori tour.
"He was good enough to ring and explain to us so that's all you can ask for," Hansen said. "The first thing I asked him is have you thought about this? Have you thought about the time in the jersey? When they tell me they have, the only thing you can do is support them.
"Nehe hasn't had much luck at all in the last probably two years, and he's getting a bit older, so he's probably starting to think I need to support my family and the money is good so I'm going to go. So, again, you support him and wish him all the best."
French club Pau earlier this week announced All Blacks fullback Ben Smith was joining them after the World Cup.