Joshua assures the Israelites that they are about to receive clear proof of God's presence among them. This divine presence is the guarantee that they will successfully conquer the land from the seven Canaanite nations [ביאור שטיינזלץ]. God Himself will actively drive out and remove these nations to make way for the Israelites [מצודת ציון].
The exact nature of the sign Joshua promises is a matter of discussion. The primary approach among commentators is that it refers to the upcoming miracle of the Jordan River splitting. When the Israelites watch the Ark pass before them and see the waters part, this massive event will serve as the ultimate proof that God is in their midst and will secure their victory over the local nations [רד״ק, מצודת דוד].
A different tradition suggests another miracle took place at that exact moment. According to this view, Joshua commanded the entire nation to step forward, miraculously fitting all the Israelites into the narrow space between the two poles of the Ark of the Covenant. The physical impossibility of fitting so many people into such a tiny area served as immediate proof of God's presence [רש״י, רד״ק]. However, this view is challenged by the argument that if such an incredible miracle of space had occurred, it would have been recorded explicitly. Because it is not mentioned, the straightforward explanation that the sign is the splitting of the Jordan River is preferred [רד״ק].