Diaz (20) plays for the Teqüe Rugby Club rugby in Argentina, and made his Test debut for the Pumas this year against Uruguay in the South American Championships.
Highlanders' head coach Jamie Joseph said Matias would be a welcome addition to the team for the coming season.
"Matias is a good young player from what I have seen so far. He's already proven that he can play at international level against the best teams in the world, so his talent is evident."
After making his test debut against Uruguay, Diaz played for the Argentinian under-20 team at the IRB Junior World Champions in France.
He was then re-selected in the Pumas squad for the Test Championship and most recently played against South Africa in Soweto.
Highlanders' general manager Roger Clark said signing Matias was a real coup for the franchise.
"We're really excited about Matias joining the team for next season. There are not many quality tight-head props available in the NZ market, so to be able to confirm a young player of his potential is great news"
Diaz will join the Highlanders squad after his International commitments in November.
