The lightning quick number 9 has made six appearances for the Fijian national side, scoring on his debut against Japan in 2010.
He has already faced a number of his new colleagues at international level and was the pick of the Fijian national side, which played Scotland on their recent summer tour.
Blessed with deft sleight-of-hand ball skills and a typically dangerous Fijian side-step, the 23-year-old was touted as one to watch when he made his debut on the international sevens circuit.
He will join up with the Warriors and provide competition for the scrum-half berth to 62 times capped Scotland international Chris Cusiter, Henry Pyrgos and Elite Development Player Murray McConnell.
Matawalu said: "It's a very exciting time to be coming to Glasgow and I'm really looking forward to joining up with the rest of the Warriors squad.
"Obviously it's going to be a massive change from playing in the southern hemisphere but I'm really looking forward to the challenge.
"The quality of the squad, a lot of the guys I played against in the Scotland match last month, is really impressive and I hope I can add to that."
Gregor Townsend, Glasgow Warriors head coach, commented: "Niko is a really exciting signing for us. He's quick, strong and is one of those types of players that can do something a bit different, the unexpected.
"To be named player-of-the-tournament at this year's Hong Kong 7s underlines what a special talent we have joining the club."
"I'm delighted he's agreed to come to Scotstoun and he'll provide some serious competition in the back line.
"He was hugely impressive in the test match in Lautoka and really caught the eye and I think the Warriors fans will really take to his style of play."
Matawalu is the seventh signing of the summer. Also joining up are second-row Tim Swinson; former All Blacks flanker Angus MacDonald; Tongan No.8 Viliami Ma'Afu; Scotland 7s centre Byron McGuigan. Canadian international Taylor Paris and returning fans' favourite Sean Lamont.
Super value 2012/13 Season Ticket Membership packages have been flying off the shelves, but there are still some great seats available in both the Main and North stands at Scotstoun. We strongly advise supporters not to delay their purchase so they can secure one of the best spots for the entire campaign. Season Ticket Members get all 14 home regular season RaboDirect PRO12 and Heineken Cup matches for the price of 9 - a saving of up to £145. For full information on the benefits of being a 2012/13 Season Ticket Member and to download our Season Ticket Membership brochure, supporters are invited to visit www.glasgowwarriors.org