Parnell will take over from Pakistan paceman Rana Naved-ul-Hasan as the county's overseas player from June, pending approval from Cricket South Africa.
The 21-year-old left-arm seamer has represented South Africa in all three formats of the game and played in England for Kent in 2009.
Parnell, who is in the South Africa squad for the forthcoming World Cup, said: "I'm very excited about the prospect of playing for Sussex.
"I believe it will be a great learning curve and I will definitely gain more experience playing alongside some seasoned professionals as well as international cricketers."
Sussex's professional cricket manager Mark Robinson added: "We are delighted that one of South Africa's brightest talents has joined us.
"He will give us not only a wicket-taking threat, but the potential for valuable runs."