Carragher will join the broadcaster in August 2013, ahead of its biggest ever football season, adding to a line-up that includes Gary Neville, Jamie Redknapp, Graeme Souness, Niall Quinn and Alan Smith.
The 2013/14 season on Sky Sports comprises over 500 live matches from the Premier League, European and international game.
Carragher said: “I watch Sky Sports all the time and I’m a huge fan. I can’t wait to be part of their coverage and work with the best in the business. What Sky has done for football for over 20 years is incredible and I’m thrilled to be part of their exciting plans for next season.”
Barney Francis, managing director of Sky Sports, said: “Jamie has everything you want in an expert analyst; opinions, experience and incredible knowledge. He’s hugely respected throughout the game and I know his immense insight on today’s players, teams and tactics will make our football coverage even better.
Carragher spent his entire playing career with Liverpool and in 734 appearances for the club, the 35-year old won the UEFA Champions League, UEFA Cup, two UEFA Super Cups, two FA Cups and three League Cups.
Last year Sky announced a price freeze for its pub and club subscribers until "at least June 2013".