After Sheets passed a physical on Sunday morning, the Braves signed the oft-injured pitcher to a minor league contract.
The 33-year-old Sheets, who will report Wednesday to Double-A Mississippi, threw a simulated game Thursday at Georgia Tech that the Braves and four other teams attended.
The two sides agreed to contract terms Friday.
Sheets said he felt good after throwing a bullpen session Sunday to former major league catcher Eddie Perez at Turner Field. Perez, the Braves' bullpen coach, played the 2003 season with Sheets, a Louisiana native, in Milwaukee.
"I ain't telling you I'm throwing 100 (mph), but I'm just saying the ball's coming out of my hand really good," Sheets said. "Breaking ball's spinning. Eddie even told me my cutter-slider looked good. I know he's lying."
The right-hander last pitched in 2010 with Oakland, going 4-9 with a 4.53 ERA in 20 starts.
Atlanta's rotation took a hit recently when Brandon Beachy was lost for the season to a torn elbow ligament. Beachy was 5-5 over 13 starts with a 2.00 ERA, tied for lowest in the majors. He had surgery June 25.
Sheets, a four-time NL All-Star, missed the 2009 season after undergoing a similar surgery on his right elbow. He played for Milwaukee from 2001-2008, going 86-83 with a 3.72 ERA in 221 starts.
Oakland general manager Billy Beane took a chance on Sheets in 2010, paying him $10 million on a one-year contract.
Sheets landed on the disabled list for the seventh time in his career, undergoing surgery to repair a torn flexor tendon and a torn elbow ligament.
He is scheduled to make 75 pitches and hopes to last five innings on Wednesday. In his next start, Sheets hopes to go six innings and throw 90 pitches.
The Braves' Double-A affiliate is in Pearl, Miss., a suburb of Jackson and a 90-minute drive from Sheets' Louisiana home.
Atlanta general manager Frank Wren believes Sheets, if healthy, could give the Braves a boost.
"Our hope is that this will be a nice addition," Wren said. "We're getting a guy who's a four-time All-Star. I just think we haven't been as consistent as we'd like."