The 30 year old, who has 13 caps for the Socceroos, replaces Fawzi Bashir, the Oman international whose contract was terminated at the insistence of the new coach Josef Chovanec last week.
Carle completes the Abu Dhabi club's foreign quartet and will join his teammates at their training camp in Portugal on Wednesday.
Baniyas have retained Andre Senghor, the Senegalese forward, and made two new signings – Mohamed Zidan, the Egyptian forward, and Ismail Belmaalem, the Moroccan defender.
The Sydney Morning Herald reported Carle's signing but Baniyas said it was still not official.
"We have agreed on the deal but the paperwork isn't complete. It will be done in the next day or two, and then it will be official," said a club spokesman.
Carle, speaking to the Australian daily, said he had mixed emotions about leaving Sydney just four weeks before the start of the new A-League season.
"Let's be honest, my first season here was an absolute disaster, but last year I felt I turned the corner and won over the crowd," he said.
"I'm back feeling good, I'm back playing good, and I was really looking forward to working under "Crookie" [the new coach Ian Crook]. I'm excited about the challenge, but sad to be going at this stage.
"Obviously from a family point of view, and a financial point of view, it's a great opportunity. Hopefully I'll be back in a year to start all over again, that's the plan. But with football, you never really know what's around the corner."
Carle, who spent three years in England with Bristol City and Crystal Palace before returning to Sydney in 2010, is hoping the move will kick-start his international career.
"I haven't spoken to Holger [Osieck, the Australia manager] yet, but we've got the Socceroos captain [Neill] playing over there [UAE], we've all seen how well "Bresh" [Mark Bresciano] has been going since he went there, so if anything this can help me," Carle said.
Neill spent last season at Al Jazira. His contract was not renewed but he signed for Al Wasl last week. Bresciano who topped the scoring chart for Al Nasr in 2011/12 before leaving halfway through his two-year contract to join Al Gharafa of Qatar.
Carle said he is looking forward to playing in the Pro League.
"I like the warmer weather, it slows everyone else down so I don't look so slow," he said. "Seriously, it's a new challenge, a different chapter, but I feel the style there will suit me down to the ground."
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