As reported by AAP in December, the 21-year-old had been given permission by the Broncos to negotiate with other NRL clubs.
The Dolphins confirmed the move on Thursday, the delay in his release due to a recently finalised change in management.
"We obviously know Tesi very well as he is a Brisbane-born player we have watched come through the grades and become an NRL regular and an international," Dolphins chief executive Terry Reader said.
"We have always said that January would be a busy month for recruitment, and bringing Tesi into our squad is a great acquisition."
Niu has been mentored by Dolphins assistant and Tonga coach Kristian Woolf, who gave him his international debut at half-back in 2019 for an invitational side that beat Great Britain 14-6.
The youngster played two games for Tonga at the recent World Cup.
He will create depth at the back for Dolphins coach Wayne Bennett, who has already signed former Broncos and Gold Coast No.1 Jamayne Isaako, as well as North Queensland flyer Hamiso Tabuai-Fidow.
Euan Aitken, Brenko Lee, Edrick Lee, Oliver Gildart and Robert Jennings will also compete for backline spots.
Niu scored 11 tries in 32 games for the Broncos, but was leapfrogged as the preferred No.1 by Te Maire Martin last year after suffering a serious hamstring injury. He also had the returning Reece Walsh ahead of him looking forward to the 2023 season.
"Tesi has been in the Broncos' system for a number of years and is highly regarded across the club," Brisbane coach Kevin Walters said.
"But we believe he will receive more opportunities elsewhere, and it's an indication of our respect for Tesi that we have allowed him to depart.
"We wish Tesi all the best in the next part of his journey."
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