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.
MANCHESTER CITY 2022-23 SEASON RATINGS: Ederson -7. No Golden Glove this year but remains vital to the way City build from the back. Getty
Stefan Ortega - 7. Enjoyed great success in FA Cup conceding just a single goal in six matches. EPA
Kyle Walker -7. Ended the season at the top of his form after a dip earlier in the campaign. Reuters
Rico Lewis - 6. Teenager can be proud of first season at top level. Made 14 appearances and a big impression. PA
John Stones - 9. Season of his life playing as a central defender, right back and midfielder. Class. Hard to fault. AFP
Ruben Dias - 8. Missed a chunk of the season but was back to commanding best on the run in. Getty
Aymeric Laporte - 5. Couldn’t force his way into the starting eleven often enough but dependable. Getty
Manuel Akanji - 7.5. Turned out to be a bargain buy. His experience and class shone through in tough moments. Getty
Nathan Ake - 8. Most improved player this season. Key to build up play down the left and reliable in the middle. Getty
Joao Cancelo - 4. Never reached his brilliant best and left for Bayern Munich on loan mid-season. Future up in air. Getty
Sergio Gomez - 5. Some glimpses of class going forward but like others before him found it hard in first season under Pep. Getty
Rodri - 9. Probably the best holding midfielder in the world at present. Took his game to new heights. Getty
Kalvin Phillips - 5. Did little wrong but struggled to make an impact with Rodri in such commanding form ahead of him. Getty
Bernardo Silva - 7. If this was his last season at City, he went out in style. The chief architect of Real Madrid’s UCL exit. Getty
Ilkay Gundogan - 9. The bigger the occasion the better he played. Captain was pivotal to all the big moments in the campaign. AFP
Kevin De Bruyne - 8. Maintained his ridiculously high standards as one of the top playmakers the game has ever seen. EPA
Phil Foden - 6.5. Stop-start season thanks to injuries but his class shone through when he got a run. Getty
Riyad Mahrez - 6. His close control remains mesmerising and his goals played a vital part. EPA
Jack Grealish - 8. Vying with Ake for the biggest leap of improvement. Fully earned Pep’s trust. PA
Cole Palmer - 5. Just didn’t happen for the homegrown youngster who still has bags of potential and time on his side. Reuters
Julian Alvarez - 7. Overshadowed at City by Haaland’s exploits but a fine season for the World Cup winner. Getty
Erling Haaland - 9.5. Would have been 10 but Pep tends to improve players in their second season! Simply a goal-machine. PA
Pep Guardiola - 9. Re-invented his tactics masterfully and turned the team into a winning machine with an incredible mentality. Getty