He won a by-election in Clifton-with-Maidenway with almost 70% of the vote, beating the Conservative candidate who took 15% of the vote.
The vacancy in the ward was opened up after Liberal Democrat Ruth Pentney died earlier this year.
Mr Sanders lost his Torbay seat to Conservative Kevin Foster in May's general election after 18 years.
Former Liberal Democrat Torbay MP Adrian Sanders has been elected to Torbay Council.