The 27-year-old yesterday joined the League of Ireland leaders until the end of their season in November after deciding to move on from Dunfermline Athletic.
The out-of-contract former Cowdenbeath and Partick Thistle striker was offered reduced terms to stay with the Fife side but has opted to try a fresh challenge over the Irish Sea.
Sligo, managed by Ian Baraclough, have a two-point lead over Drogheda United at the summit of the Irish top-flight, with a game in hand.
"There's an option of next season if I enjoy it and they like me. I've been impressed by the manager and the boys have been great, so we'll see how things pan out," said Buchanan. "We're top of the league at the moment and it would be tremendous if we could stay there and I could play in the Champions League next season."