The Lilywhites have completed the signing of the former Galway United, Moreland Zebras and St Patrick's Athletic striker ahead of the 2013 campaign
The 25-year-old striker was out of contract after his time at Richmond Park and has agreed to join Stephen Kenny's side for the 2013 campaign.
Speaking to dundalkfc.com, Faherty explained that he is looking forward to working with Lilywhites boss Stephen Kenny and praised the newly assembled squad.
"I was training in Galway and Stephen got in touch with me," said the former Galway United striker. "Dundalk were heading down for a training weekend in Wexford and I was invited along.
"I got a feel for the squad and the coaching and I was very impressed. There is a really good bunch of lads at Dundalk this season.
"There is a good mixture of young players and experience. Obviously, it will be great to work with such an experienced manager as Stephen Kenny," he added.
Meanwhile, Dundalk have also completed the signing of former St Patrick's Athletic midfielder Darren Meenan, who has agreed to join the club for the 2013 season.
Elsewhere, Limerick boss Stuart Taylor has bolstered his squad with the signing of two new players.
Former Huddersfield defender Robbie Williams has agreed to join the Shannonsiders on a permanent deal, while the club has also secured striker Craig Curran on loan from Rochdale.