The former Carlisle United player was a transfer target of Championship rivals Queen of the South and Dunfermline Athletic. However, the Galabank side’s request for a payment for his three seasons of development at the club ended the chance of either move becoming a reality.
Todd played as a trialist for Dumbarton last weekend and the move to the Cheaper Insurance Direct Stadium looked set to fall through as well until Todd agreed to become an amateur player.
Dumbarton manager Stephen Aitken said: “It was a difficult situation for everyone as Annan were quite within their rights to ask for compensation. We do not have a budget to pay anything like that so it looked like Josh was going to have to return to League 2 with Annan or take a break from the game.
“However, his agent approached us and said that he was willing to join as an amateur and play on that basis for us next season. I am delighted to bring him here but I must admit I do have sympathy for Annan.”