Shepherd - who has nine caps for Australia - had agreed to move to the Saints on a three-year contract following the end of his Super Rugby commitments with the Western Force.
However, the club opted against bringing the 28-year-old to Franklin's Gardens following recommendation from its medical team.
As a result, Sale have now swooped to sign the utility back who can play at full-back or on the wing.
"It's a pleasure to have Cameron on board," said Sale Sharks chief executive, Steve Diamond.
Meanwhile, Corne Uys has also joined Sale from Newcastle Falcons and will play at outside centre.
"Corne will give us extra cover as a specialist thirteen and will work with Will Addison. He has Premiership experience, possesses a sound skill set and is very knowledgeable," said Sharks director of rugby Bryan Redpath.
"He's fitted in very well and we're looking forward to seeing him play here."
Gilbert has released a new line of rugby cleats. The Gilbert Virtuo 8S is part of the exciting new product. Check it out.
The entire All Blacks apparel line has been updated for 2013/14. Check out the New Zealand All Blacks polo.
The Nike Tiempo is a solid rugby cleat and one of few styles still made from full-grain natural leather.
The Gilbert Blitz 8S rugby cleat is a great cleat at a great price of $69.99. Get a new pair of cleats today.
A cool looking all black rugby cleat with the high performance adidas is known for. Get in the Gear!
Wear the crest of the British and Irish Lions on your t-shirt. A great look for the summer.
The All Blacks Performance t-shirt is black with hints of blue from the training jersey. Very Cool.
The New Zealand All Blacks training jersey for 2013/14. Get in the Gear!
The USA Rugby Pro Alternate rugby jersey is perfect for any fan of the Eagles. Get yours to wear during the summer Test matches.
The NEW All Blacks 2013/14 jersey has arrived at World Rugby Shop. Dare to wear the colors of the All Blacks.