The 20 year old former Under 19 United States of America international has featured for Arsenal a number of times this season in the Carling Cup, scoring for Arsene Wenger's side in the win over Manchester City in the competition.
Coming from Virginia, Daniel started of his career at Highbury as a striker, but has since been converted to become a left sided player that can play both at left back and left midfield. Karbassiyoon will initally join on a one months loan deal.
Confirming the news to the Official Club Website, Town boss Joe Royle said: "Daniel was off home to spend Christmas in Virginia but he has given that up to spend it with us at Millwall!
"He can play left-back or left side of midfield and providing the paperwork is completed in time - and I'm sure that will happen - he will be added to the squad for tonight's game.
"With Drissa out until January, we are short of numbers in the full-back positions but Daniel will give us options now."
Click here for a player profile on Town's latest signing.