Maradona, whose last coaching role was with the Argentine national side, will join the club at a June press conference, Al Wasl said in a statement. Terms of his contract were not disclosed.
A statement from the club read: "Al Wasl can confirm soliciting the services of one of the greatest footballers of all time."
Maradona, who won the 1986 World Cup with Argentina as a player, has been out of football since his side departed last year's competition following a 4-0 thrashing by Germany.
He is due to take up his post with Al Wasl, who currently lie fourth in their domestic league, when the new season gets under way in September.
The deal was agreed "after lengthy negotiations held with Maradona", the club said, adding that details of his contract would be revealed at a news conference next month when he will be formally introduced.
Al Wasl chairman Marwan Bin Bayat added: "The value of the contract is worthy of the stature and reputation of the great legend."
Up until the quarter-final disaster against Germany, Maradona's Argentina side had been widely tipped to win the 2010 World Cup after impressing in the group stage and second round.
But the Argentine Football Association decided not to renew his contract after the finals, when the 50-year-year-old refused a request to make changes to his backroom team.
In September, Maradona pleaded to be given his job back, saying: "I'd give my life to be the national team coach. I'm dying to be with the team. I am thirsty for revenge."
But the AFA decided to appoint his former team-mate Sergio Batista to the role.