The Swansea-born back represented the region at Under-20 level before linking up with Cardiff RFC in 2007.
Halfpenny made his competitive senior Blues debut against Ulster at Ravenhill in May 2008 and has since become one of the most prolific point scorers in the European and domestic game.
Currently in his seventh senior season with Blues, Halfpenny has made a total of 87 appearances and amassed 568 points for the region.
Halfpenny has become a formidable force in the international arena since his debut for Wales in 2008 against South Africa.
He claimed the RBS Six Nations Player of the Tournament in 2013 and shone in the 2013 British & Irish Lions tour of Australia, starting all three Tests and being named Player-of-the-Series.
Richard Holland, Chief Executive at the Blues, said: "Retaining Leigh has been one of our highest priorities and we have done all we can in our power as a region and business to try and facilitate that.
"His outstanding performances for Blues, Wales and the Lions have made him one of the most prized players in world rugby. We put our very best offer on the table but he has been the target of a major European club with significant resources that we simply cannot compete with at this current time.
"Leigh has been a fantastic servant to the Blues and I know how hard a decision this has been for him. He has been presented with a tremendous opportunity to play overseas and feels this is the right move at this stage in his career. He will go with our very best wishes for success with his new club.
"Given the current uncertainty over the competitions the regions are playing in next season and revenues attached to that, it is understandable why players are looking elsewhere," he added.
"The threat to Welsh rugby and our ability to keep top players in Wales is highlighted by the fact the French game is underpinned by broadcast revenues that dwarf anything we receive from our domestic league.
"We need to be able to compete and have meaningful competitions that will increase funding into Welsh rugby. It's not surprising that Welsh players would choose the certainty of strong weekly French competitions over the uncertainty of the weekly club competition in Wales.
"The future of the game in Wales must be sorted out now - this situation simply cannot be allowed to continue."
Phil Davies, Director of Rugby, said: "Leigh is one of the most professional and dedicated players I have ever worked with and a proven match winner. His mental strength sets him apart from others.
"His development from the age grade system through to international honours is testament the career pathway we have here at Blues and I look forward to seeing the next generation now follow his lead to the top of the game.
"We wish him all the very best for his career overseas from the end of this season. I know he will be determined to finish strongly with Blues and the door will also be open to his return."