The talented midfielder, who has notched up over 100 caps for BVB in his five years at the club, joins the Citizens for a fee believed to be around £20 million plus add-on fees.
The German international, who is currently injured having dislocated his knee last month, expressed his delight at joining Pep Guardiola’s side.
“I’m thrilled to have signed for Manchester City,” he said. “When I learned of City’s interest my heart was set on coming here and things have moved very quickly.
“I have loved my time with Borussia Dortmund and I would like to thank the club and the supporters for the five very happy years I spent there.
“They gave me a platform to play on and I became a better player because of the belief, patience and trust they showed in me.
“Now I have a new challenge and that is to achieve great things with City. The opportunity to work with a coach like Pep Guardiola is something I am really looking forward to and I am flattered to be the first signing the Club has made this summer.”
The 25-year-old feels his best years are still ahead of his as he targets success in England.
“I can promise the City fans I will give everything to help us win titles both in England and the Champions League,” he said. “These are exciting times.
“I have my best years ahead of me and I think we can achieve great things together. I can’t wait to begin this new chapter in my career.”