The 29-year-old forward was with the Sabres on a professional tryout contract (PTO) since Dec. 29. Buffalo began training camp Dec. 31.
"We need players to just do things right," Buffalo coach Ralph Krueger said of Sheahan on Thursday. "We need pros that can lead by example, whether it's in practice or then during games. I knew in the research we did on Riley that No. 1, he's an excellent character.
"… It's important that we want people to treat each other right, but also they need to bring something on the ice because good guys aren't going to help us if they don't execute within a role."
Sheahan scored 15 points (eight goals, seven assists) 66 games with the Edmonton Oilers last season and no points in four games in the Stanley Cup Playoffs.
Selected by the Detroit Red Wings in the first round (No. 21) of the 2010 NHL Draft, Sheahan has scored 164 points (66 goals, 98 assists) in 513 regular-season games with the Oilers, Florida Panthers, Pittsburgh Penguins and Red Wings, and seven points (three goals, four assists) in 33 playoff games.
The Sabres open the regular season Jan. 14 against the Washington Capitals.