The 27-year-old has been one of the standout performers for the Black Caps in the one-day international series against England as well as the ongoing Champions Trophy on these shores.
The acquisition of McClenaghan for the competition which gets under way later month is therefore a big coup for Lancashire, whose other overseas signing is veteran Australian batsman Simon Katich.
McClenaghan said: "I am delighted to be joining Lancashire for the Friends Life t20.
"I have enjoyed being part of the NZ tour of the UK and Champions Trophy squad so far and the opportunity to broaden my cricket experience by playing county cricket was too good to turn down.
"Lancashire are a club with a great history and tradition and I hope to be able to help them to T20 success this season."
Head coach Peter Moores added: "To have an international quality left-arm seamer joining us for the Friends Life t20 competition is very exciting and a real boost to the squad.
"The fact that Mitchell is coming straight out of international cricket in England means he will hit the ground running and his competitive nature looks a perfect fit for how we go about our cricket."
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