Brazilian forward Gabriel Jesus. PHOTO: AFP
Jesus, who is reported to have cost City an initial fee of £27 million ($36 million, 32.2 million euros), will remain on loan at Palmeiras until December before moving to Manchester in January.
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He is currently on duty with hosts Brazil at the Olympic Games in Rio de Janeiro.
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"Manchester City is one of the best clubs in the world so I'm really pleased to sign," Jesus said in comments published on the City website.
"We have many great talents in the team and a fantastic manager in Pep Guardiola that I can learn so much from.
"I'm looking forward to showing the City fans what I can do and I think we'll have a great future together!"
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