Carters contract will begin on December 1 after he has fulfilled international commitments in the autumn. He will return to New Zealand in June 2009.
The All Blacks star said Perpignans involvement in the Heineken Cup where they have been drawn alongside Tigers, Ospreys and Treviso in the pool stages clinched his decision on where he would play his rugby in Europe.
I am very happy to have made my decision and chosen Perpignan, he told the clubs website at http://www.usap.fr/
It is a big club, with a very proud team which wants to earn a title. To compete in the European Cup was a decisive aspect in my choice.
Club president Paul Goze added: "It is a big moment for our club. Dan is the worldwide number one in his position and I think it confirms our ambitions here.