The 33-year-old midfielder joins the Birds on a free transfer after partying ways with Highlands Park following the club sake to Tshakhuma Tsha Madzivhandila.
Nyatama joins fellow veteran players Lebogang Mokoena and Vuyo Mere who have been retained by Swallows following their promotion to the elite league.
The Birds on Thursday also announced the signing of former JDR Stars striker Moeketsi Makhanya.
Makhanya was once a reported target of the PSL ‘Big Three’ – Kaizer Chiefs, Orlando Pirates and Mamelodi Sundowns – following his good season for Stars in the National First Division in the 2018/19 season, but that move never materialised.
Meanwhile, Swallows are believed to be in talks with Chiefs for the services of midfielder Given Thibedi. Thibedi, who was on loan at Swallows from Chiefs, played a major role in helping the Birds get promotion now Swallows want to retain him for the 2020/21 season.