The Men of Gwent had been in the hunt for a scrum-half to replace Danny Lee, who was forced into retirement through injury earlier this season, and they have now signed Petri from Sale Sharks for the remainder of the current campaign.
Petri will compete with Wayne Evans and youngsters Jonathan Evans, James Leadbeater and Nicky Griffiths for the No9 jersey at Rodney Parade as the Dragons look to move up from 10th place in the Magners League standings.
"We will introduce Mike as soon as possible," said Dragons head coach Paul Turner.
"Jonathan Evans is one for the future and, with James Leadbeater and Nicky Griffiths, we're back to our five scrum-halves which tends to look after the Dragons and the Newport club."
Petri appeared off the bench for Newport RFC against Glamorgan Wanderers in the Principality Premiership last weekend and has been named in the Dragons' squad to face Connacht on Thursday.
The 26-year-old made his USA debut in the 2007 World Cup, playing against eventual winners South Africa. He has gone on to win 17 caps and captained his country against Wales in 2009.
"I'm delighted to be here, it's a great opportunity and I'm looking forward to getting on the pitch for the Dragons," added Petri.
As for the Ospreys, the reigning Magners League Champions today confirmed the signing of 18-year old South African born, Welsh qualified, Torrance as they look towards the future.
Torrance is from Durban but qualifies for Wales through his mother, who was born in Blaenavon before moving to South Africa with her family as a teenager.
"We are delighted to be able to welcome Matthew to the region. Our commitment to developing young Welsh talent is well documented, and as a Welsh qualified player, Matthew certainly fits the bill in that sense," explained the Ospreys' elite performance director Andrew Hore.
"Our extended scouting network has identified him as someone who has the potential to develop into a quality player, and by welcoming him into our environment, we are offering him the chance to fulfill that potential.
"We have put in place structures and systems which are geared towards giving young players such as Matthew every opportunity of representing both the Ospreys and Wales in the future, and we look forwarded to working closely with him to give him the best opportunities to achieve his ambitions."
Having represented Kwazulu Natal at U16 and U18 level, Torrance arrived in Wales over the festive season and is now hoping to learn his trade from the likes of Wales star Mike Phillips.
"I've come here to develop as a rugby player, it's a big challenge for me and I'm a bit anxious about what is in store for me, but very excited at the same time," said Torrance.
"It's the first time I've ever been to Wales but it's been brilliant. Everyone has been very welcoming, making me feel at home.
"I know that this is a good environment for development, and that the Ospreys are good at bringing on players, so hopefully this will be a really positive move for me.
"Coming from South Africa, I'm aware that Ricky Januarie was here last season and made a big impact so I've got big shoes to fill. The Ospreys were last season's Magners League champions and want to be one of Europe's best teams, so it's a good place for me to learn the game.
"It's a great opportunity for me and I'm really excited about working with the coaches at the Ospreys to help me become a better player."