Rodwell came through a medical this afternoon as his new team-mates were defeating Chelsea in the Community Shield and has signed a five-year contract.
Although the fee was undisclosed, it is believed to be in the region of ?12million.
There are a number of add-ons as part of the contract, which could eventually push that fee up towards ?15m.
Rodwell will wear the number 17 shirt vacated by Jerome Boateng when he joined Bayern Munich last year.
The 21-year-old will have little chance to get to know most of his new team-mates though, as he will immediately join up with the England squad for Wednesday's friendly with Italy in Berne.
"I relish the opportunity of playing with some of the best players in the world and continuing my development," Rodwell told www.mcfc.co.uk.
Rodwell has been earmarked as a player of promise for some time. Unfortunately his career has stalled due to a succession of injuries that have hampered his progress and meant he goes into this week's game with just two international caps to his name.
However, he has played a full part in Everton's pre-season programme after being forced to miss the Olympics and will hope to be involved on Sunday when City open their Premier League defence against Southampton at the Etihad Stadium.
"The hard work starts today as I start to help contribute to the club winning more silverware," said Rodwell. "The season has started really well with the Community Shield win."
Source: PA
Source: PA