Milner-Skudder started his career at Manawatu and has spent the past three seasons at Super Rugby side Hurricanes.
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 has endured a horror run of injuries, including two shoulder surgeries and a broken bone in his foot, since bursting onto the scene and starring for the All Blacks at the 2015 Rugby World Cup.
Cape Town - Western Province and the Stormers are unhappy with French giants Toulon and their dealings with Eben Etzebeth over a move to the club after the 2019 Rugby World Cup.
GETTY IMAGESNehe Milner Skudder has signed a three-year contract with Toulon
Given Milner-Skudder's ongoing injury battles - he returned home from the last of his 13 tests in Japan on November 3 with another shoulder issue which saw him miss the New Zealand Maori tour - cashing in on a lucrative contract overseas makes sense. "The first thing I asked him is have you thought about this?"
"He was good enough to ring and explain to us so that's all you can ask for", Hansen told reporters in Auckland on Friday, where he announced his own decision to step down after the global showpiece in Japan. Have you thought about the time in the jersey?
"All you can do is support them. So, again, you support him and wish him all the best".
Milner-Skudder is the second 2015 World Cup victor to announce this week they are leaving New Zealand rugby next year after Ben Smith said he would join Pau.