An efficient algorithm is presented for computing exact system and survival signatures of K-terminal reliability in undirected networks with unreliable edges. K-terminal reliability is defined as the probability that a subset K of the network nodes can communicate with each other. Signatures have several advantages over direct reliability calculation such as enabling certain stochastic comparisons of reliability between competing network topology designs, extremely fast repeat computation of network reliability for different edge reliabilities and computation of network reliability when failures of edges are exchangeable but not independent. Existing methods for computation of signatures for K-terminal network reliability require derivation of cut-sets or path-sets which is only feasible for small networks due to the computational expense. The new algorithm utilises binary decision diagrams, boundary set partition sets and simple array operations to efficiently compute signatures through a factorisation of the network edges. The performance and advantages of the algorithm are demonstrated through application to a set of benchmark networks and a sensor network from an underground mine.