Powell's departure from the London club came after he was involved in a bar-room incident last month, which left him needing stitches to a head wound.
Powell has courted controversy in recent times after he was also involved in an incident with a golf buggy last year which landed him with a 15-month driving ban and an immediate exit from the Wales squad.
Despite that, Sharks' executive director of sport Steve Diamond welcomed the signing of the 29-year-old, who has been capped 17 by his country and toured South Africa with the British and Irish Lions two years ago.
"This is a huge signing for us," he said in a statement on Sale's website.
"Andy has tremendous experience, is one of the best ball-carrying forwards in world rugby and is one of the final pieces in the jigsaw as far as our recruitment goes for next term."
While Powell, who had also reportedly been courted by Worcester and Munster, has been quick to find a new club his inglorious departure from Wasps has cast his international future into doubt in a World Cup year.
Wales coach Warren Gatland, who is strong on discipline, has summoned him for showdown talks and his place in the autumn showpiece could be in jeopardy, especially with strong back-row competition.
He has not been included in Wales' squad to play the Barbarians on June 4 and, with the deadline for the naming of the 30-man squad on August 22, Powell will have just four games to cement his place for the tournament in New Zealand in September and October.
Powell was in the headlines for the wrong reasons in February last year after pleading guilty to driving a golf buggy while unfit through drink after the player was arrested at a motorway service station at junction 33 of the M4 hours after Wales' victory over Scotland in the Six Nations.
He was dropped from the Wales squad with immediate effect and at the subsequent trial was banned from driving for 15 months and fined £1,000.
He did, however, battle his way back into Wales contention during this season's autumn internationals. He started the Six Nations opener against England in February before being injured.
Gilbert has released a new line of rugby cleats. The Gilbert Virtuo 8S is part of the exciting new product. Check it out.
The Barbarians are one of the top invitational rugby sides with a long history and classic rugby jersey.
The Nike Tiempo is a solid rugby cleat and one of few styles still made from full-grain natural leather.
The Lions get ready for their matches with this green training jersey. It's what the players wear. Get in the Gear!
A cool looking all black rugby cleat with the high performance adidas is known for. Get in the Gear!
Wear the crest of the British and Irish Lions on your t-shirt. A great look for the summer.
The Lions are ready to get their Australia tour underway. They arrive in Perth on Monday.
The New Zealand All Blacks training jersey for 2013/14. Get in the Gear!
The USA Rugby Pro Alternate rugby jersey is perfect for any fan of the Eagles. Get yours to wear during the summer Test matches.
The NEW All Blacks 2013/14 jersey has arrived at World Rugby Shop. Dare to wear the colors of the All Blacks.