The 19-year-old has signed a one-year deal with the club and will join Elliot Dickman’s under-23 side.
Dunne made six appearances for Scottish Championship side Falkirk last season.
After developing through the youth sides at Falkirk, the midfielder made his debut in October 2017 and went on to feature eight times for the club.
Speaking to the club website, Dunne suggested the Stadium of Light was the ideal place to continue his development.
He said: “I’m delighted to sign for Sunderland because it’s a fantastic club and I really feel this is the perfect place for me to learn and improve.
“I’ve been training with the lads for the last few days, the standard has been high, and it’s been competitive.
“I have been schooled well at Falkirk and now I’m ready for this exciting challenge in my career.”
Jack Ross’ side will undoubtedly be aiming for promotion again this season after coming so close in the 2018/19 campaign.
They face Wimbledon at the Stadium of Light on Saturday.
This doesn’t look like a signing that is likely to aid Jack Ross’ side’s promotion push this season but, at 19, he is a player that could make an impact in the future.
The club are asking Dunne to prove himself by handing him a one year deal, so it is going to be interesting to see how he gets on for Dickman’s side.
It is a low-risk move from Sunderland and one that could pay dividends in the future.