The left-back, who will reportedly cost the club an initial £49.4m, is the fourth defensive reinforcement brought in by Pep Guardiola, who signed Real Madrid's Danilo yesterday for an estimated £26.9m.
Tottenham's Kyle Walker and goalkeeper Ederson are the other players to join a new-look backline with Mendy's Monaco team-mate Bernardo Silva a £43.6m signing to bolster midfield.
And City, who are now clear 15/8 favourites to win the Premier League having finished a distant third in Guardiola's first season in charge, may not be finished there.
They are 11/8 to sign Ryan Bertrand from Southampton, and prominent in the betting for both Alexis Sanchez (3/1) and Kylian Mbappe (8/1).
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Mendy has signed a five-year contract and will now join up with his new team-mates in the United States, where Guardiola and his squad are preparing for their second pre-season tour game against Real Madrid in Los Angeles.
"I am absolutely delighted to be joining Manchester City," Mendy told mancity.com.
"This is what I wanted from the very beginning. As soon as the (French) championship was over I talked to my family and it was all clear in my head, I wanted to join Manchester City.
"They are one of Europe's leading clubs and in Pep Guardiola they have a manager committed to playing attacking football.
"I am sure that over the next few years we will be successful."
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The deal took a while to complete, but city's director of football, Txiki Begiristain was pleased to have secured their first-choice target.
"Benjamin has all the qualities we are looking for in a full-back. For such a young player, he has a wealth of top-level experience," he said.
"He is undoubtedly one of the world's best full-backs, our number-one target in this position. We are all delighted to have him here at Manchester City.
"I'm sure he will prove a fantastic addition to the squad."
