Matawalu, who signed his first professional contract when he joined the Warriors in 2012, will move to the south west of England when his contract expires in the summer.
He has played 60 times for the Warriors, scoring 110 points and was nominated the club's Player of the Season in 2012/13.
Glasgow Warriors head coach Gregor Townsend said: "Niko (Matawalu) took to the professional game straight away and has worked hard to improve his game.
"He is well liked by our players, coaches and especially our supporters, and we've loved having him at the club.
"When he moves on at the end of the season we'll wish him well in the next stage of his career, but there is still a lot of rugby to be played before then.
"He has always given one hundred percent for the club and I know he will continue to do so until the end of the season.
"I'm sure he will be very popular with the Bath supporters, as he has been in Glasgow."
Niko Matawalu added: "I've really enjoyed my time in Glasgow and I'd like to thank the Warriors for this opportunity.
"I'm looking forward to playing for the club and in front of the supporters until the end of the season.
"The club and Scottish Rugby made me a very good offer, which made it a difficult decision to leave, but I was ready for a new challenge.
"We have some big games coming up in the GUINNESS PRO12 and in Europe and if I keep working hard hopefully I'll be involved in those matches.
"My focus is on the Warriors and helping the club achieve success this season."
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