The 29-year-old right-back will spend the 2011/12 season at the Dubai club, with an option to make his move permanent at the end of the campaign.
Marwan bin Bayat, Wasl's chairman, said the transfer was another step in restructuring the squad ahead of Diego Maradona's first season as coach.
"As it is clear by now, we are making reinforcements to most positions and we are very happy with the progress so far," bin Bayat said. "Al Wasl will have a different look and feel next season, but at the same time we want to ensure that all players gel together well and form a strong unit that is able to start the season on a positive note and compete from day one."
Masoud is Wasl's fourth Emirati signing of the summer, following the capture of Hamad Al Hosani, a striker who joined from relegated club Al Dhafra, Mubarak Hassan, the UAE Under 21 and Olympic team defender from Fujairah and Ali Rabeah, another defender, from Emirates.
Wasl, who released all three of their foreign players from last season, also signed Edson Puch, the Chile international, from Universidad de Chile before Diego Maradona arrived at the club.
Bin Bayat said of Masoud's move: "This will not be our last signing. We are in negotiations with different sides and we are taking our time in assessing and evaluating different players. We are not in a hurry, as we still have plenty of time till the transfer window closes.
"We want to ensure that our decisions are made based on a rational and a well thought out strategy that is in line with our overall objectives."