The Reading striker has agreed to return to his former club on loan until July 2013 as Trevor Croly continues to prepare the Hoops for the season ahead
The 21-year-old, who has been capped at under-21 level for Ireland, joined the Royals from the Hoops in January 2012 after a series of impressive performances in the Europa League.
Sheppard began his career with Shelbourne before being signed by English Premier League side Everton in 2007. He was released by the Toffees in 2010 and joined Galway United before joining Shamrock Rovers in 2011, where he won the Airtricity Premier Division and Setanta Sports Cup.
Meanwhile, Airtricity Premier Division side Cork City have confirmed that centre back Eoghan Murphy has joined the club ahead of the 2013 campaign.
Speaking to the club's official website, Cork manager Tommy Dunne said the club has 'high hopes' for Murphy, noting that he expected the 19-year-old defender to 'push for a first team place'.
"He spent the last six months on loan at College Corinthians where he played every game and did really well, and that has given us an indication that Eoghan can step up to senior football," said Dunne. "He has progressed well and we are delighted to have him back with us.
"We have high hopes for him over the coming season and we are looking for him to push for a first team place over the course of the season."
Murphy revealed that he is eagerly anticipating the challenge of playing senior football for the Turners Cross side and said that he hoped to stake a claim for a place in Tommy Dunne's squad.
"I'm looking forward to getting into training and hoping I can push on and aim to get into the matchday squad and then challenge for a place in the team," he said.