Nosworthy has made 13 appearances for Sunderland this season and 125 in total since joining from Gillingham in June 2005.
Sheffield United manager Kevin Blackwell revealed the Blades beat off a challenge from Portsmouth to land Nosworthy.
Blackwell said: "We needed a quality centre-half who had pace and Nyron is a terrific defender who has played a lot of Premiership games with Sunderland.
"He has a good reputation in the game, fits the bill and we had to fight off competition from Portsmouth to get him.
"We first spoke last Friday before we left for WBA and he was very impressed with what he saw down here."
Nosworthy could go straight into the Blades' starting line-up at Watford on Tuesday night as fellow centre-halves Marcel Seip (hamstring) and Andrew Taylor (groin) are injured.