Foster has not coached since leading the All Blacks to last year's World Cup final, where they lost 12-11 to South Africa.
Toyota's director of rugby is former All Blacks head coach Hansen, whom Foster worked under as an assistant from 2011 to 2019.
Foster said he was "determined to make a difference" at Toyota, who are sixth in the 12-team Japan Rugby League One table after 13 games this season.
The club declined to say exactly what coaching role he would take on.
"I have been very impressed with their ambition and am confident we can work together to achieve the goal of winning titles," Foster said in a statement released by the club.
"And of course I am looking forward to linking back up with Steve and working with him again."
Foster was All Blacks head coach for four years, taking over from Hansen after the 2019 World Cup.
He was replaced after last year's World Cup by Scott Robertson, whose appointment was announced months before the tournament.
Foster refused to reapply for the job because he thought it should be handled after the World Cup and felt it was an unnecessary distraction.
Hansen said Foster was "someone I have a strong personal connection with and trust deeply".
"He's not only an exceptional coach but also a wonderful friend, so I'm eagerly anticipating his arrival," Hansen said.
"We've already had productive discussions about our plans for next year, and the excitement is palpable."
Fly-half Beauden Barrett and scrum-half Aaron Smith, who both played in last year's World Cup final, are both currently at Toyota.
Barrett will return to New Zealand at the end of the season.
