The Belgium international was voted Player of the Year for 2014-15 in Germany after a stellar season for the Bundesliga runners-up.
His performances were so impressive that City kept up their pursuit throughout the summer and have now broken their transfer record with a deal Thegoalmac understands is worth more than £55 million, including add-ons.
City had been in talks with their German counterparts for much of the transfer window and for weeks their efforts to bring the former Chelsea man back to England were resisted.
Wolfsburg CEO Klaus Allofs kept up a defiant public stance until this past week, when City's resolve to do a deal shone through and they agreed to pay the second highest transfer fee in British football history.
Allofs met with City's Txiki Begiristain at the Champions League draw in Monaco on Thursday and De Bruyne was left out of the club's squad for Friday night's league clash with Schalke at the Volkswagen Arena.
He flew to England on Saturday to complete a medical - despite City boss Manuel Pellegrini's claims that he knew nothing of the transfer - and the move has now been completed ahead of the international fixtures.
De Bruyne could make his debut against Crystal Palace at Selhurst Park on September 12, after representing his country in Euro 2016 qualifiers against Bosnia and Cyprus.
"I want to reach the highest level possible as a player and I think the most important thing is that at the end of the season we can be happy and maybe have some titles," De Bruyne told the club's official website.
"I think this is the most important for the Club, the players and for the fans of course."
Manuel Pellegrini added: "We are very happy to have added Kevin to our team and I have no doubt that he will be a big success on his return to the Premier League.
"It takes a special footballer to improve our squad and I have no doubt that Kevin is certainly one of those – he has all of the mental, physical, tactical and technical attributes required to fit straight in.
"We like to play attractive, attacking football and bringing in a player like De Bruyne will only aid us as we fight on four fronts."
The 24-year-old enjoyed a glittering 18-month spell with Wolfsburg after being sold by Chelsea at the start of 2014 having fallen out of favour with Jose Mourinho, returning to Germany after a loan spell at Werder.
This is the second time this summer that City have broken their transfer record after Raheem Sterling was recruited from Liverpool in a deal that could rise to £49m.
The Belgium playmaker now becomes the second most expensive player in the British game, behind Angel Di Maria, who joined Manchester United for £59.7m last summer.
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