The club said yesterday that the West Indies all-rounder, one of world's leading T20 players, will join David Warner, the big-hitting opener, at the Thunder, one of two Sydney-based teams in the new eight-team league.
Gayle played for Western Australia in the last two seasons of Australia's previous T20 competition, which comprised teams from the six state associations, but he reportedly rejected an offer of A$250,000 (Dh984,731) to remain with the Perth Scorchers.
No contract details were released for Gayle, who was the leading scorer in the 2011 Indian Premier League, where he made 608 runs for Royal Challengers Bangalore at an average of 67.55 and a phenomenal strike rate of 183.13.
John Dyson, a former Australian Test batsman who has coached Sri Lanka and the West Indies, will guide the Sydney Thunder, based at the former Olympic stadium in Sydney's western suburbs.
"Having worked well with John Dyson in the West Indies, I was impressed with his plans for the Thunder and I think the team will have a great chance to win this competition," Gayle said in a statement released by the club. "I look forward to walking out to open the batting with David Warner when the season starts."
Dyson said the signing of Gayle was a major boost for the Thunder. "I know that he brings a stack of experience and the sort of match-winning ability that only a few players have," Dyson said.
"To have an opening partnership of Chris Gayle and David Warner is something that all cricket fans should be excited about, and I can't wait to see them in action together this summer."
Gayle averages 32.46 with a strike rate of 144.49 in T20 internationals for the West Indies.
The Big Bash clubs have a salary cap of A$1m per season, with a squad of up to 18 players - including two foreigners - on fixed retainers rather than match fees. The competition will start in December and finish in early February.
Graeme Wood, the West Australia Cricket Association chief executive, confirmed yesterday that Perth had not been able to agree to terms with Gayle's management team.
"We presented Chris with a very generous offer, and his management indicated that if our contract terms were near enough to the amount he was chasing then his preference was to play for the Perth Scorchers," Wood said.
"We have invested a great deal in Chris Gayle the past two years and he has forged some great friendships here in the west."
* Associated Press