Insp Sparrow is returning to the city where he was in charge of the intelligence section from 2001-06, before relocating to the Bay of Plenty area.
He held senior positions in the Bay of Plenty and Rotorua area, including area tactical response manager, tactical co-ordinator and strategic operations and planning roles.
He also served as commander of the NZ Police contingent to the Solomon Islands during 2010-11.
Southern district commander Superintendent Bob Burns said Insp Sparrow would bring a "wealth of experience in leading intelligence-led policing models and has an impressive record of achieving significant crime reduction results".
"I have no doubt that Insp Sparrow will make a considerable impact on policing the Dunedin-Clutha area and he will be a valuable asset to the district management team."
Insp Sparrow, who takes up the position next week, said he was "looking forward to the challenge that a new role brings and to working alongside the community and local police to ensure that people not only feel safe, but are actually safer".
He takes over from the Dunedin-Clutha police area commander of the last 12 years, Inspector Dave Campbell, who is the Southern district's policing development manager.
