The 31-year-old, who was born in Argentina but has captained Italy, has played 146 matches in seven years with the Leicester Tigers, winning four English Premiership titles and the Player of the Year award in 2006-07.
"He will be remembered as one of the iconic players in the club's history," Leicester director of rugby Richard Cockerill told the club's website.
Big-spending Toulon defeated fellow French club ASM Clermont to clinch their first European Cup last month, before losing the French Top 14 final to Castres.
They have already signed six new players including South Africa and Australia wingers Bryan Habana and Drew Mitchell.
- Sports & Recreation
- Leicester Tigers
- Richard Cockerill