The talented 21-year-old joins the treble winners after committing to a five-year deal that will keep him at the Etihad Stadium until 2028.
Widely considered one of the best young defenders in the world, Gvardiol joins City from RB Leipzig where he made 87 Bundesliga appearances across two seasons, winning back-to-back German Cups.
The Croatia international has also earned 21 caps and was an integral member of the team that finished third at the 2022 Qatar World Cup.
Gvardiol was understandably ecstatic after moving to the "best team in the world".
“I have always dreamt of one day playing in England and to be doing so now with Manchester City – after the season they have just had – is a real honour for me," he said in a statement.
“Anyone who saw Manchester City play last season knows they are the best team in the world. To win the treble says everything you need to know about the quality this team has.
“To be joining City is something very special for me and my family. To have the chance to work with Pep Guardiola, too, will be amazing for me. I know I am not yet the finished article and I am sure my game will progress under the best coach in football.
“To be linking up with Mateo Kovacic will also be special. He’s a top footballer and I hope we can both help City achieve another successful season in 2023/24 and then beyond.”
City's director of football Txiki Begiristain added: “We are very happy to bring Josko to Manchester City.
“He is a player we have watched closely, and we feel he has a superb set of attributes. Top clubs all over Europe have been monitoring him, so to bring him here is great news for us.
“Josko has so many qualities – everything you want in a centre-half. He is fast, competitive, combative, strong in the air, impressive in possession of the ball, with strong self-belief and a good character. He is left-footed, too, which offers us good options at the back."
Earlier, manager Guardiola said that City will be boosted by the arrival of Gvardiol. City now have six senior central defenders, but Guardiola said that was not a problem given the demanding nature of the season.
"The season is so long, there is many, many games. It is absolutely not too many," he said.