The Croatian teenager has put pen to paper on a deal with the Premier League champions after completing a medical on Tuesday.
Palaversa, 18, will be sent back to Hadjuk on loan until 2020, but City
The young playmaker expressed his delight after the transfer was made official on Thursday: "I'm Hajduk's saying, playing at the Poljud was always my dream, and after all, I'm happy to see the work of the Hajduk Academy recognized one of the biggest clubs in the world.
"Thanks to Manchester City on the trust, there is still a lot of work ahead for me, I have not yet shown all I can and I hope to play for Hajduk to justify the great trust I received from England champions."
Palaversa has played 14 matches for Hadjuk this season and contributed two goals, developing quickly and enhancing his
He has represented Croatia at every youth level between U-14 and U-19, with some suggestion that he could be called up to the senior squad for Euro 2020 if he continues on his current trajectory.
Manchester City will not be able to
Palaversa is the English giant's first signing of the January window, despite the fact Pep Guardiola had been looking at signing a new defensive midfielder, to provide cover for Fernandinho.
Guardiola's men also have a Carabao Cup final against Chelsea to look forward to, while they also negotiate the latter rounds of both the FA Cup and Champions League, with an