The Portuguese giants confirmed on Wednesday morning they had struck an agreement, reported to be worth £3m, to secure the highly-rated Tannadice teenager.
Attacking midfielder Gauld, 18, has penned a six-year deal with Marco Silva's side after jetting out to Lisbon for talks on Tuesday.
He can now look forward to Champions League football after the 18-times Portuguese champions finished second in the Primeira Liga to qualify straight into the group stages.
In a statement released on the club's website, Sporting confirmed the deal and also announced they had inserted a huge 60m euro release clause into the Scotland Under-21 international's deal.
It said: " Sporting Clube de Portugal and Dundee United FC reached an agreement for the player Ryan Gauld to represent Sporting in the next six seasons
A termination clause in the amount of 60million euros was set."
United also released a brief statement announcing the sale of a player dubbed "Mini Messi" in tribute to his mesmerising dribbling skills
It said: "Subject to the usual formalities, Dundee United confirm the transfer of Ryan Gauld to Sporting Lisbon, for an undisclosed fee, was completed last night
Everyone at the club wishes Ryan sincere best wishes in his future career."
Gauld was handed his United debut on the final day of the 2011/12 season with a three-minute run-out against Motherwell at Fir Park
But it was last season which saw him announce himself in real style as he formed part of an exciting midfield line-up which helped Jackie McNamara's side to the William Hill Scottish Cup final
The PFA Scotland young player of the year award nominee was left out of the starting line-up in the 2-0 defeat to St Johnstone at Celtic Park but finished the campaign with eight goals from 38 appearances
It was reported last year that Italian giants Roma were monitoring Gauld's progress, while Manchester United, Arsenal and Real Madrid have also sent scouts to see him play
But Tannadice boss McNamara admitted the Taysiders could not stand in his way after Sporting came calling
Speaking on Tuesday night, he told Sky Sports News: "Selfishly we would like to keep Ryan as long as possible but realistically we knew at one point he would be leaving to go on to bigger and better things
"There has been a number of clubs interested I believe and that is testament to the ability that Ryan has got
Naturally we would like to have him here a lot longer."
Source : PA
Source: PA