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Barcelona also showed interest in the 19-year-old.
The player signed a contract until 2021, but will only join the "Citizens" in the beginning of 2017 and will spend another six months in his native Brazil. The English club paid 32 million euros for him.
"Manchester City" is one of the best clubs in the world, so I am really happy," Jesus told the official Man City website.
"We have a lot of great talents in the team, and I can learn a lot from the fantastic coach Pep Guardiola."
"I can't wait to show the City fans what I can do, and I think we will have a great future together."
During the past season, the Brazilian scored 11 goals and provided three assists in 14 matches.
