The 21-year-old, who can play either in defence or midfield and has a Europa League appearance as a substitute for the Gunners under his belt, is new manager Darren Moore’s first signing.
Sheaf told Rovers’ official website: “I’ve played at centre-back in the past couple of seasons, but I was in midfield prior to that – but I enjoy either and will do my best.
“I like to get on the ball and make things happen. I’m really excited and looking forward to getting going now.
“I’m really happy to take this step up. I feel like I’m past U23s football now and this is a great opportunity to get experience in the men’s game. I just want to get in and settled down and know the boys, then impress the new manager.”