The 27-year-old Spain international, who joins last season's Premier League runners-up from Sevilla, claimed back-to-back Europa League winners' medals in 2006 and 2007, as well as triumph in the 2010 World Cup and Euro 2012 with the national team.
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"I've won some important titles, but the Champions League is something you always have in mind," he
is quoted as saying by The Sun. "Also I want to enjoy the Premier League and have a really strong year.
"The truth is it's like a dream for me to play for a club like Manchester City and fight for titles and everything that comes with that.
"Individually, City have such good players and the idea of playing there with such amazing players and fighting for a title - because I feel we have the team to do that - is amazing," he added.
"The challenge we have is to win important titles. I think pressure is great, it can make the game more exciting and force us to play our best.
City have been successful in recent years and are continuing to build a great team and I am honoured to now be part of it. There is a strong squad that can have a great season."