Ognenovski hasn't played since he was released by Qatari club Umm-Salal last month and could come straight into the Sky Blues squad for this weekend's huge clash with Adelaide.
It's a huge boost to Sydney's finals hopes after the club missed out on Eddy Bosnar last week, with the experienced defender choosing the Central Coast over the harbour city.
"I'm delighted to be able to sign for Sydney FC," Ognenovski said.
"It is always good when you are wanted by a big club and Sydney FC are an iconic club in Australian football. It will be an honour to pull on the sky blue shirt.
"I'm looking forward to the challenge of playing back in the A-League and I know the standard and the quality of the league.
"Sydney FC is an exciting club and having followed the competition this year, I believe the team on its day can beat anyone.
"I want to play at a level to help the team progress into the finals and hopefully we can do some damage when we get there."
The 34-year-old, who has played 22 times for the Socceroos, was also being chased by a number of clubs abroad but opted for Sydney in the hope of pushing his claims for World Cup selection.
And he should get his chance at Sydney, who are a little thin at the back after the departures of Pascal Bosschaart and Tiago Calvano already this season.
"Sasa has a wealth of experience at international and club level and will bring us extra stability in the back four," Sky Blues coach Frank Farina said.
"He recently helped Australia qualify for the World Cup in Brazil and has also won the Asian Champions League and Asian Player of the Year, so we are bringing in real quality to back up what we already have in that position.
"Sasa demands success and is the type of player and character we want at this club."
Ognenovski, who has played in the A-League with Brisbane and Adelaide, returns to Australia after three years playing in South Korea with Seongnam Ilhwa Chunma.
He captained the club to the Asian Champions League title and won the 2010 Asian Footballer of the Year award before spending two seasons in Qatar with Umm Salal.
Ognenovski is expected to start training with the Sky Blues on Thursday ahead of Saturday's clash with the Reds at Allianz Stadium.
He is expected to form a solid defensive partnership with Serbian Nikola Petkovic, who re-signed with the Sky Blues for a further two years on Monday.
