Nieve will help bolster Orica-Scott's climbing contingent, which already includes Damien Howson, Ruben Plaza, Roman Kreuziger and Carlos Verona. The team has spent the last two years building a core group around their general classification prospects, Esteban Chaves, and Simon and Adam Yates.
"I especially know Esteban and the Yates brothers," Nieve said in a statement released by Orica-Scott. "Despite being very young, they have a great talent and have achieved important things.
"I would like to help the team to get more important victories and be part of it. I would like to be in the big races, I would like to be important on mountain stages and be close to those three guys to give them a hand."
Nieve turned professional in 2009 with Euskaltel-Euskadi and has won two stages and the King of the Mountains classification at the Giro d'Italia. He has three top-15 results in Grand Tours, but in recent years he has specialised in riding as a domestique in the mountains.
"Signing Nieve is bolstering the armada we are building in backing up our young general classification riders," Matt White added. "Last year we could add Roman Kreuziger and now Mikel comes with the same level of experience.
"They have both been part of teams that have won the biggest races in the world and he is certainly going to be of great value to our general classification trio."
Nieve is the second high-profile climber to leave Team Sky. Peter Kennaugh will ride for Bora-Hansgrohe in 2018, while Orica are set to lose Jens Keukeleire to Lotto-Soudal. For all the latest news on transfers, click here.