The 32-year-old halfback, who won 51 test caps for the All Blacks, returned to New Zealand earlier this year after two seasons in Britain.
He will plug the hole at the Blues left by fellow World Cup winner Piri Weepu's departure for London Welsh in the English Premiership.
"Jimmy brings competitiveness, plenty of experience and great game awareness which is something we were really looking for," Blues coach John Kirwan said in a statement.
"Piri Weepu left a bit of a hole but we think Jimmy's really going to step into that role and be fundamental to the growth of this franchise."
Cowan left New Zealand in 2012 to play for Gloucester with the rare distinction of having played 100 times for his province Southland as well as racking up a century of Super Rugby appearances with Otago Highlanders.
He returned to link up with Tasman for the current provincial championship and said he was looking forward to stepping up a level at the Blues next season.
"I had a great time overseas but I'm really happy to be back in New Zealand and I still have a real hunger and desire to prove myself at the next level," Cowan said.
"I'm excited about moving up to Auckland to join the Blues and feel I can really contribute towards helping them achieve success."
(Reporting by Greg Stutchbury; Editing by Nick Mulvenney)
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