The northern franchise announced yesterday it had signed Collins for next season along with Taranaki utility back Stephen Perofeta.
Collins has been linked with the Blues over the past couple of weeks.
The 23-year-old first played for Otago in 2012, a year after leaving Otago Boys’ High School, and was a member of the New Zealand under-20 side in 2013.
He played his first couple of seasons for Otago in the midfield but was not always first choice, with injuries also getting in the way.
At the end of last season, he went to Wales and played for Llanelli Scarlets, where he played the majority of the season at fullback.
He has made the position his own this year for Otago and has developed some nice touches to his game.
He has never been selected for the Highlanders and will make his Super rugby debut next year.
Blues coach Tana Umaga said he had been impressed with the displays from Collins this year.
"Michael is another to come through the national age group system. We believe he has the speed and skills required to cover a number of backline positions and will be a real asset to the Blues," Umaga said.
The Super rugby sides are due to be announced in a couple of weeks.