No financial details were disclosed of the 27-year-old's move, which comes two days after the capture by City of Valencia winger David Silva.
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Toure, who played for the Ivory Coast in the World Cup where they were eliminated in the group stage, joins his brother Kolo in Roberto Mancini's Eastlands squad, and will take a holiday before joining City's pre-season tour of the United States.
"This is another fantastic signing for Manchester City and I am very pleased Yaya has joined us; he is a very good player," manager Mancini told the club's website.
"Everyone knows Yaya is a player that we have admired for a long time and we would like to welcome him to Manchester City. He has played at the top level with Barcelona and I am sure his experience and ability will be very important for us."
Toure joined Spanish champions Barcelona from Monaco in 2007 and was part of the Catalan club's Champions League-winning side of 2009.
Spanish media reports said Silva joined City for around 32 million euros.
Barcelona confirmed that an agreement had been reached on their website but said: "The final deal is dependent on Yaya Toure resolving once and for all his contractual relationship with Barcelona.
"Once the agreement is completely closed, we will make public the economic conditions of the sale."
Toure had been pushing for a transfer, unhappy at being used as a substitute for much of last season when he only started 18 times in La Liga.
Barca coach Pep Guardiola had been turning increasingly to Spain midfielder Sergio Busquets, a product of their youth system, for the holding role in midfield.
