The 48-year-old worked at Barca between 2003 and 2010, and helped the club recruit stars such as Ronaldinho, Samuel Eto'o and Dani Alves.
At City he will replace Brian Marwood, who will become managing director of the new City Football Academy (CFA) when it opens at the start of the 2013-14 season.
City said that Begiristain will "take responsibility for supporting the first-team manager, Roberto Mancini, in first-team recruitment and operations".
The moves reunites Begiristain with new City chief executive Ferran Soriano, with whom he worked during his last two years at Barcelona.
"I am very pleased indeed to have been offered such an exciting opportunity," said Begiristain, who played for Real Sociedad and Barcelona during his playing career and also won 22 caps for Spain.
"The progress and on-field achievements at Manchester City are plain for all to see and I am honoured to have been asked to contribute to its future success."
Soriano said: "Sustainability has always been central to (City chairman) Sheikh Mansour's investment in Manchester City Football Club.
"The long-term future of the football club is dependent upon our ability to recruit and develop young players all the way through to the first team squad.
"The focus must be on both academy and first team and the close co-ordination between them.
"Given the scale and importance of this challenge, we want to commit our very best people to it.
"I am delighted that Brian Marwood will take leadership of the CFA initiative and I am equally very pleased to welcome an individual of Txiki Begiristain's calibre to the club."
Source: AFP
Source: AFP