Gwynn was batting .232 with a team-leading four triples and 17 RBIs in 103 games this season. Gwynn, who is making $850,000 this season, is just 7-for-54 since July 1. He has one year left on his two-year contract and is due to make $1.15 million next season.
The Dodgers have 10 days to trade or release Gwynn. If they do neither and he clears waivers, he could report to Albuquerque.
After acquiring Shane Victorino from the Philadelphia Phillies to play left field last week, the Dodgers have a set outfield with Matt Kemp in center and Andre Ethier in right. The team designated another reserve outfielder, veteran Bobby Abreu, for assignment last week.
Sands has hit safely in his last 10 games with Albuquerque, batting .476 (20-for-42) with six home runs and 21 RBIs since July 27.
Since the All-Star break, Sands leads the Pacific Coast League with nine home runs, a .733 slugging percentage and 28 RBI and ranks ninth with a .372 batting average in 23 games.
This will be Sands' second appearance with the Dodgers this season after hitting .200 in eight games during his first call-up in May. He has a .248 average with four home runs and 27 RBIs in 69 career games with the Dodgers.
ESPNLosAngeles.com's Mark Saxon contributed to this report.