The 35-year-old has been heavily tipped to take on a role in TV following his decision to hang up his boots at the end of the campaign.
Despite previous reports claiming that the former England international could be captured for BT Sport's team, it has been confirmed that the centre-back will feature in Sky's coverage.
"I watch Sky Sports all the time and I'm a huge fan," Carragher told Sky Sports News. "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.
"I don't think there could be a better move for me: to retire from one of the world's best football clubs at the end of the season and then join one of the world's best broadcasters."