The 29-year-old centre left Leicester Tigers earlier this week after rejecting the 25 per cent pay cut that the club attempted to impose across the entire senior playing squad, engine his 11-year stay with the Welford Road club and his family’s 20-year association with the Tigers.
Talks between Tuilagi, Sale and Leicester on Friday confirmed that the centre was a free agent and available to sign immediately, with an agreement reached over the weekend for him to become the latest high-profile addition at the AJ Bell Stadium.
"We contacted Manu's agent and Leicester Tigers last week to discuss the player's current position," said Sale rugby director Diamond.
"After discussions on Friday, all parties - Leicester Tigers, Manu Tuilagi and Sale Sharks - agreed that the player was a free agent and was able to enter into negotiations with another club.
"Manu will be a fantastic commercial and playing addition to our squad and I am looking forward to seeing him join up with the lads at Carrington this week."
The move means Tuilagi remains available for selection by England head coach Eddie Jones, who utilised the centre during last year’s run to the Rugby World Cup final after not being able to select him for the majority of his tenure.
The Rugby Football Union does not allow coaches to select players who play their club rugby abroad unless there are “extraordinary circumstances” that are yet to be met, and a move overseas would have all but ended Tuilagi’s England career.
Fears that he would leave the Premiership arose from the fact that most clubs have already completed their business for the 2020/21 season and spent up to the newly-reduced salary cap, meaning that few had room to accommodate such a high-profile player who commands a heft pay packet.
But Sale’s lifeline means that Tuilagi will remain in the Premiership and available for England through to at least the summer of 2021, when he will have aspirations of earning selection on the British and Irish Lions tour of South Africa before deciding where his future lies.
The move is a blow for Leicster, who saw five players leave the club as free agents after their refusal to agree new terms effectively quantified as being in breach of contract.
In confirming departures including that of Tuilagi, Leicester chief executive Andrea Pinchen said: "The majority of people are going down that path with us, and a handful couldn't."
It’s understood that Tuilagi and the other players who left Leicester have the option to sue the club for constructive dismissal, with the Tigers insisting that they have been forced into the drastic cost-cutting measures - which includes 31 staff redundancies - by the financial crisis brought on following the coronavirus pandemic.