The 32-year-old New Zealand-born England international left Worcester in April, and was not included in Eddie Jones' 31-man squad for the upcoming World Cup.
Top 14 side Toulon have now signed the free agent, who will provide cover for players leaving the French club to take part in the World Cup, which runs until 30 September to 2 November.
Te'o has signed for Toulon until November, with the club announcing the deal on Wednesday. The centre will undergo a medical on Friday.
An 18-time England international and two-time British and Irish Lion, Te'o joined Worcester in 2016, after spending two years at Leinster.
Toulon's fellow Top 14 sides Racing 92 and 2018-19 champions Toulouse had also been credited with an interest in the former NRL star.