He will fill the 15th spot on the Cavaliers' roster that opened when Andrew Bogut broke his left leg.
Sanders and his agent, Joel Bell, were in Cleveland on Monday as Sanders took a physical. After his examination, the Cavaliers waived Bogut.
Sanders is attempting a comeback after two years away from the NBA, and scouts who have watched him work out recently say his timing is off a little and his muscle mass is down from where it used to be. But they report that he is still an athletic player whose talent is tempting, even considering his history of off-the-court issues.
The 28-year-old has violated the NBA's drug policy four times with positive marijuana tests. He also walked away from the game and later checked himself into a hospital for anxiety and depression.
During his five-year tenure with the Milwaukee Bucks, who drafted him in the first round of the 2010 draft, Sanders was one of the most prolific shot-blockers in the league. He has averaged 1.8 blocks per game in his career and was second in the league in blocks per game in 2012-13.
LeBron James has previously teamed with a player who's amid a career comeback and helped him find success. In January 2013, Chris Andersen had been out of the league for a year because of a bizarre legal issue that prompted the Denver Nuggets to cut him and other teams to stay away. The Miami Heat did background research, monitored him for some time and eventually signed him. It ended up being a significant move; the unexpected boost he gave them contributed to the team's repeating as NBA champions.
Cleveland has also struggled on the glass since Kevin Love went out for knee surgery. Over the past 12 games, which stretches one month, the Cavs have been outrebounded on the offensive glass by a whopping 54. The team is 6-6 in that span.
Information from ESPN's Brian Windhorst contributed to this report.