Hyundai Motorsport's German-based operation unveiled the shock development with Paddon and his co-driver John Kennard scheduled to contest seven rounds starting with Rally Italia Sardegna in June.
The i20 will be entered as Hyundai Motorsport N alongside the existing cars driven by Thierry Neuville, the second shared entry and a recently announced third car.
Paddon, a former Production WRC champion, becomes the first New Zealand driver to gain a contract to compete in the WRC.
“It is an incredible opportunity to be part of the Hyundai Motorsport team in these very exciting times. This is what we have worked so hard for, and it will allow us to step up another level with a good program, a good team and a good testing and development programme,” Paddon said.
Paddon and Kennard head off to next week's Rally Mexico to complete pre-event reconnaissance to further their learning of all WRC event routes.
Mexico will see Australian ace Chris Atkinson make his debut in the team's shared #8 i20, although unlike Paddon, the full extent of his program remains unspecified.
Other events locked in for Paddon include Poland, Finland, Australia and Great Britain in November with the other two to be decided from the remaining three events – Germany, France and Spain.
Hyundai Motorsport team principal Michel Nandan said: “As a manufacturer investing in the World Rally Championship, Hyundai Motorsport aims to support the champions of the future.”
“For this reason we decided to engage one more car at selected WRC events under the entry Hyundai Motorsport N.
“Hayden is one of the very talented drivers on the WRC scene at the moment and we will support him as much as we can to reach the highest level possible.”