"Al Wasl can now confirm soliciting the services of one of the greatest footballers of all time," the club said in a statement.
The deal was finalised "after lengthy negotiations held with Maradona" said the club, adding that they hoped the 50-year-old former Argentina captain would take the team to new heights.
Details of Maradona's contract would be revealed at a news conference next month when he would be introduced to the club.
"The value of the contract is worthy of the stature and reputation of the great legend," Marwan Bin Bayat, chairman of Al Wasl Football Co., said.
A source told Reuters on Sunday that the deal was 85 percent done.
Maradona captained Argentina to World Cup glory in 1986, while his last coaching role was also with his national side.
His spell as Argentina coach ended last July after the country's football association voted unanimously not to renew his contract following the team's 4-0 thrashing by Germany in the World Cup quarter-finals in South Africa.
Maradona takes up the job with Al Wasl, who are fourth in the domestic league, 16 points behind leaders Al Jazira, with five matches to go.
Signing Maradona is the latest move by Dubai to flex its football muscles after a private firm Royal Emirates Group bought struggling Spanish La Liga club Getafe for up to 90 million euros last month.
Former Italy World Cup-winning captain Fabio Cannavaro plays for Dubai rivals Al Ahli.
