The Dublin-born youngster started his career as a trainee at Tranmere, and went on to make 75 first-team appearances for them before joining West Brom in July 2002.
He featured just seven times for the Baggies, and had a successful loan spell at Walsall. He has two senior caps for the Republic of Ireland.
He moved to Sunderland last summer, but has yet to feature at the Stadium of Light and found himself returning to the Saddlers on loan this season.
Iron manager Brian Laws told the Scunthorpe Telegraph: "He is a highly promising young goalkeeper, who commands his box and also kicks well.
"We have not been the only club chasing him this summer and I am delighted he has agrred to sign for us."