Definitely give it a good scrubbing first (use no detergents though).
Boiling water is the way I've heard of it being prepared for aquarium use. It might not be possible though depending on the size of the pieces. Any chemical sanitizing, bleach, etc, won't work because the wood could absorb it and it would be hard to clean.
If you are worried about inverts hitchhiking (snails, etc), you could treat the tub you have it soaking in with a aquatic snail killer (from the pet store - not something from a garden store). Normally they are copper-based, so it will kill any invertebrates, but won't harm the fish (I'd still wash off the wood pieces afterwards anyways).
