Mahrez was targeted by City during the winter but the two clubs ultimately failed to strike a deal, with negotiations going down to the final day of the transfer window.
Citizens' manager Pep Guardiola is an admirer of the Algerian, and was satisfied with his dedication to the Foxes during the second stanza of last campaign despite his failure to seal the move during the winter transfer season in the January.More news: Rory McIlroy proving popular draw at Irish Open in Ballyliffin
"I am very happy to have signed for City, a team that plays great football under Guardiola", said Mahrez, a Premier League victor with Leicester.
In the four-and-a-half years since Riyad signed for the Foxes, he has played his way into the hearts of all Leicester City supporters.
If he's to become a long-term success at the Etihad Stadium and hold down a place in the side amid plenty of competition for minutes, he'll need to be prepared to show more than he did at Leicester.More news: What Is the Endgame for the Trump Trade Wars?
'Watching them from afar has been a pleasure.
A club statement from Leicester said: "Riyad leaves with the best wishes of everybody who has worked with him at Leicester City Football Club". Pep is committed to playing attacking football, which is a ideal for me, and City's performances last season were outstanding. With two years remaining on his current contract, Leicester have opted to no longer stand in his way.
Mahrez joined Leicester from Le Havre for £400,000 in 2014, and was named the PFA Players' Player of the Year during their surprise Premier League triumph in 2015-16.More news: ANP leader Haroon Bilour among 20 martyred in Peshawar blast
"I believe my own game can develop under Pep's management".
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