The 26-year-old will join the Club from Porto and will wear the number six shirt next season.
A defensive midfielder by trade, he began his career at Vila Nova in Brazil before moving to Porto in 2007 where he won four Primeira Liga titles, two Portuguese Cups and a Europa League medal.
His first European season was spent on loan to fellow Portuguese side Estrela da Amadora, where he gained important playing experience as an undisputed starter. He returned to Porto the following season and immediately cemented his place in the squad.
Fernando, who will join up with his new team-mates for pre-season training in a fortnight, said: “I am so happy to finally be joining Manchester City.
“I know there was talk of me possibly signing last January so I am delighted that the deal has now been done and that I am a City player.
“I’m looking forward to meeting my new team-mates and helping City to defend the title. It is a very exciting time to be part of this football club and I cannot wait to play in the Premier League.
“City fans can be assured I will give my all every time I play and I’m looking forward to many happy years in Manchester.
“I have enjoyed my stay with Porto and I thank the club and the fans for their support during my time in Portugal. Now I am ready for a new chapter in my career.”
Fernando is currently on holiday in his native Brazil, and CityTV will bring you the first exclusive interview with the new signing as soon as he arrives into the UK.