The six-times capped South African international rejected the overtures of three Guinness Premiership clubs to link up with another ex-Shark Shaun Payne, who renewed his own deal, at Thomond Park.
The 28-year-old Halstead said: "The reports were really very good about the Munster side, the set-up and the people over there. I only heard very positive things about everything. The vibe was really good.
"Then again you only have to look at some of the players they have - (Ronan) O'Gara, (Peter) Stringer, Paul O'Connell - guys like that who I knew about from the internationals. Then there is Christian Cullen who travelled across the world to play there.
"So when the opportunity came to play with Munster I took it. I made my mind up very quickly."
Connacht number 8 John O'Sullivan, former Munster lock Mick O'Driscoll, Shannon prop Tony Buckley (pictured), Ireland Sevens flyer Tomas O'Leary, Bourgoin's Italian prop Federico Pucciariello and Old Crescent prop Eugene McGovern, who moves up from a development contract, will also serve under returning Munster director of rugby Declan Kidney come the autumn.
Lock O'Driscoll, 26, left Munster for Perpignan in 2003, and will return to his native Cork after failing to hit the heights this season - making just two appearances for the Catalans in the Heineken Cup.
At 6ft 5in and 294lbs, Shannon prop Buckley has proven a constant handful for AIB League Division One defences in recent times. The 24-year-old has already made an appearance for Munster in the Celtic League, and will look to impress with ball-in-hand.
In addition to the new signings, the province, who have two squad positions still to fill and seven development contracts to finalise before May is out, have renewed the contracts of Payne, Donncha O'Callaghan, Denis Leamy, Trevor Hogan and Frank Roche.
MUNSTER Squad 2005/06:
Tony Buckley, Paul Burke, Christian Cullen, Paul Devlin, Anthony Foley, Jerry Flannery, Trevor Halstead, John Hayes, Rob Henderson, Trevor Hogan, Marcus Horan, Anthony Horgan, John Kelly, Stephen Keogh, Mossy Lawlor, Denis Leamy, Eugene McGovern, Mike Mullins, Donncha O'Callaghan, Paul O'Connell, Ronan O'Gara, Tomas O'Leary, John O'Sullivan, Shaun Payne, Federico Pucciariello, Alan Quinlan, Frank Roche, Frank Sheahan, Peter Stringer, David Wallace.