The bold selection is one of two injury-enforced changes to the side that crushed Australia 47-29 in the opening Test in Sydney last week.
Taylor, son of 1987 World Cup-winning centre Warwick Taylor, was selected ahead of 10-Test pivot Colin Slade after injuries ruled out New Zealand's top three flyhalves Dan Carter, Aaron Cruden and Beauden Barrett.
The uncapped Taylor and Slade were rushed into the squad this week and although Slade has proven international credentials, Hansen said the decision to blood Taylor in the crucial number 10 position was an easy choice.
"He is mentally tough and plays the game with a lot of confidence and maturity," the coach said of the 24-year-old, who played at 12 or 15 for the Crusaders in this year's Super 15.
"These factors, along with his assured goalkicking under pressure, have made this an easy selection. We have every faith that he will handle the occasion with aplomb."
Slade, a member of the All Blacks 2011 World Cup-winning squad until he suffered a severe groin injury in the quarter-finals, has been named on the bench for Saturday's clash in Wellington.
The other injury change was telegraphed in the first Test, when Brodie Retallick came on for lock Luke Romano, who suffered a groin tear in Sydney and is out for the remainder of the Rugby Championship.
While this will be Taylor's first Test, for prop Tony Woodcock it will be his 100th, becoming the fourth All Black to reach a century behind Richie McCaw (117), Keven Mealamu (105) and Mils Muliaina (100).
Hansen believes the Wallabies will potentially be more dangerous opponents this weekend after last week's drubbing, during which the dominant All Blacks outscored the Australians six tries to two.
"They will be hurting after that Test and will throw everything at us," he said.
"They will be looking to play with more accuracy and intensity so, therefore, we will need to meet -- or better that -- with a higher level of execution right across the board if we are to be successful."
Apart from the two changes to the starting side, Hansen has reorganised his bench with hooker Dane Coles and prop Wyatt Crockett returning from injury and lock Jeremy Thrush called up as lock cover. In the backs, Charles Piutau replaces Ryan Crotty.Teams:
15. Israel Dagg, 14. Ben Smith, 13. Conrad Smith, 12. Ma'a Nonu, 11. Julian Savea, 10. Tom Taylor, 9. Aaron Smith, 8. Kieran Read, 7. Richie McCaw (captain), 6. Steven Luatua, 5. Sam Whitelock, 4. Brodie Retallick, 3. Owen Franks, 2. Andrew Hore, 1. Tony Woodcock
Substitutes: 16. Dane Coles, 17. Wyatt Crockett, 18. Charlie Faumuina, 19. Jeremy Thrush, 20. Sam Cane, 21. Tawera Kerr-Barlow, 22. Colin Slade, 23. Charles Piutau.