"Mahrez handed in a transfer request in January but his move broke down with Manchester City not prepared to pay a £95m package demanded by Leicester".
The 27-year-old, signed from Le Havre for £400,000, leaves the Foxes having made 180 appearances, scoring 48 times.
"Watching them from afar has been a pleasure", Mahrez told the club's website.
"Manchester City is a very big club with very big players and with the confidence gained from a year ago, I think this season will be a very good season. They're redefining the English game and I wanted to be a part of it", he said.
"I believe my own game can develop under Pep's management".
Mahrez was the subject of four failed bids from City in the January transfer window and missed training for a week. Have your say in the comment section below.
"Riyad is a hugely talented player".
"The 17-year-old attacker has updated his display picture to himself in a Man City shirt and also changed his Instagram bio, which states that he's now a Manchester City player after exiting La Liga giants Barca. We're sure he will bring additional attacking quality to our squad".
The Algeria winger, who nearly moved to the Etihad Stadium in January only for City to refuse to meet Leicester's valuation, underwent medicals in Manchester yesterday afternoon before signing a five-year contract.
According to a UK Daily Mail report, Manchester City have failed in two previous attempt to land the Algeria global, it now seems the former Premier League victor will be leaving the King Power Stadium for the Etihad this summer.