The 20-year-old Diaz has won four caps for the Pumas and started the opening match of this season’s Rugby Championship against South Africa, before he was dropped back to the bench for the second game.
“We’re really excited about Matias joining the team for next season,” Highlanders general manager Roger Clark said in a statement.
“There are not many quality tight-head props available in the New Zealand market, so to be able to confirm a young player of his potential is great news.”
Diaz’s signing could also open the door for other Super Rugby teams to attract developing talent from the South American country, with Southern Hemisphere rugby officials looking at a possible expansion of Super Rugby from 2016.
SANZAR chief executive Greg Peters told Reuters earlier this year that realigning the competition to include Argentine teams was being discussed.
“There is no doubt they make no secret of their aspiration to be in Super Rugby,” Peters said in an interview. “That’s part of the discussions right now is to how they can be accommodated.
“The professional game in Argentina does not exist, their professional game is in Europe.
“For them to be successful long term they will need to have an involvement in the professional game and not just the international level.”
Diaz is the second international signing by the New Zealand franchise in two days with the team confirming on Tuesday that Japan scrumhalf Fumiaki Tanaka had re-committed with the Dunedin-based side for another season.
(Reporting by Greg Stutchbury; Editing by John O’Brien)