Parris, 25, announced her decision to leave City after five years at the club earlier in May, having been crowned the Football Writers' Association's Women's Player of the Year.
"I'm so excited, it's the biggest club team in the world for women's football," Parris told Sky Sports.
"There's no better way to kick on my career than to play for this team.
"I'm so excited to play with some of the best players in the world and show what I can do on the football pitch against some of the greatest teams as well.
"I was torn because obviously you want to make sure that you pick the right team but ultimately when Lyon come in for you it's not a team you turn down and I knew if I was to turn it down it would be a massive regret."
Parris will join England team-mate Lucy Bronze at the club, with both players included in Phil Neville's squad for the upcoming World Cup, which is hosted by France.
Lyon also boast the inaugural women's Ballon d'Or winner Ada Hegerberg, who scored an 18-minute hat-trick to down Barcelona in the Champions League final.
City are well placed to cope with Parris’ departure, with teenage forward Lauren Hemp expected to play a bigger role next season after scoring in the FA Cup final win over West Ham.
Nick Cushing’s side, who won a cup double in 2018-19 but missed out on the league title to Arsenal, also confirmed the signing of Birmingham City and England striker Ellen White last week.
After four years with Everton and a further four with City, Toxteth-born Parris become the Women’s Super League’s all-time top scorer in November, beating previous incumbent Eni Aluko’s tally of 36.
She finished third in the goalscoring charts in 2018-19 with 20 goals in 27 appearances, behind Arsenal’s Vivianne Miedema and Chelsea’s Bethany England.