The Inter Milan striker flew in for a medical in the morning and City confirmed later that he had signed a five-year deal.
City coach Roberto Mancini also surprisingly named Robinho in his 25-player squad, saying he would sit down with the unsettled Brazil striker next week to thrash out his future.
James Milner, Aston Villa's England winger, is also expected to join City in the next few days with Craig Bellamy and midfielder Stephen Ireland on the way out of Eastlands.
Balotelli, who turned 20 on Thursday, made his international debut for the Italians against Ivory Coast in London on Tuesday and Mancini said he was looking forward to working with a player he nurtured while in charge of Inter.
"I think that Mario is one of the best players of his age in Europe, and I am very happy to be working with him again," Mancini told the club's website.
"His style of play will suit the Premier League and because he is still so young there is a big chance for him to improve. He is a strong and exciting player and City fans will enjoy watching him."
Big-spending City, who open their season at Tottenham Hotspur on Saturday, did not reveal the fee for Balotelli but British media expected it to be about 24 million pounds.
Robinho has made no secret of the fact he wants to stay with Brazilian club Santos, where he has been on loan since January, after an unhappy spell at City.
This season the Premier League has imposed a 25-man limit on squads, with eight "home-grown" players included in that number. That is putting extra pressure on coaches who are being forced to let some players leave.
Neither Bellamy, one of City's most effective playters last season when they narrowly missed a top-four finish, or Ireland are in Mancini's 25-man list.
Robinho, the most expensive signing in British soccer after joining for 32.5 million pounds from Real Madrid almost two years ago, made the cut after reluctantly returning to Manchester on Thursday but will not feature for City at Spurs.
"He only arrived back yesterday and is tired from the World Cup and other games he's been playing," said Mancini. "But he's on my list and I will talk to him next week about the situation."
HEADING OUT
One player definitely leaving is Wales striker Bellamy, who said last week he had not spoken to Mancini for six months and knew he was not part of the Italian's plans.
Bellamy will not play for City again, according to Mancini, and is free to find a new club with Celtic, Sunderland and Fulham heading the queue to sign him.
Tottenham manager Harry Redknapp is a long-term admirer but said on Friday he doubted City would sell him to the club that beat them to a top-four place last season.
"This is the problem of the list," said City's manager. "There are players on there and those who aren't are out.
"Craig is not on the list. What he said isn't important, it's false. I work with the players every day and speak with them.
"I don't want to talk ab
