Gundogan was ruled out of Euro 2016 with Germany due to a knee injury but incoming manager Pep Guardiola has identified him as a key component of the team he will build at City next season.
The 25-year-old, who won the Bundesliga and German Cup with Dortmund in 2012 and reached the final of the Champions League in 2013, has signed a four-year contract with the club.
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City have reportedly paid around £20 million for a player who has struggled with persistent fitness problems in recent seasons. He missed the 2014 World Cup with a back problem and in May disclocated his kneecap, ruling him out of the Euros in France.
“I’m thrilled to have signed for Manchester City,” said Gundogan. “When I learned of City’s interest my heart was set on coming here and things have moved very quickly.
I have loved my time with Borussia Dortmund and I would like to thank the club and the supporters for the five very happy years I spent there. They gave me a platform to play on and I became a better player because of the belief, patience and trust they showed in me.
“Now I have a new challenge and that is to achieve great things with City. The opportunity to work with a coach like Pep Guardiola is something I am really looking forward to and I am flattered to be the first signing the Club has made this summer.
“I can promise the City fans I will give everything to help us win titles both in England and the Champions League. These are exciting times. I have my best years ahead of me and I think we can achieve great things together. I can’t wait to begin this new chapter in my career.”

Ilkay Gündogan mit Joachim Löw

Image credit: AFP

'The reason for my transfer is Guardiola'

In a separate statement the player tweeted out, Gundogan revealed that he could not pass up the chance of playing for Guardiola, who "convinced me with his philosophy".

'An intelligent and versatile midfielder'

City's director of football Txiki Begiristain hailed the signing of a man who can play in a number of midfield roles: in the deep, shuttling forward or even as a No. 10.
Ilkay is an excellent addition to our team and we are delighted to have him on board. He is an intelligent and versatile midfielder who can operate in a number of different roles. I think our supporters will enjoy his work ethic and technical ability and I believe he will be a very important player for us in the coming years.

Our View: A vital recruit who can help transform City

Douglas Costa (Bayern Munich) à la lutte avec Ilkay Gundogan (Borussia Dortmund), le 4 octobre 2015

Image credit: AFP

When Pep Guardiola was appointed Bayern Munich manager in 2013 he said of his recruitment plans: "It's either Thiago or no one". The rebuilding job at City will be far more extensive with new recruits needed in all areas, but the starting point is the same: Guardiola wants a new midfielder who is perfectly equipped to get across his philosophy in the area of the pitch which matters most. Thiago was a Spanish speaker in Germany; Gundogan a German speaker in England. Guardiola has a spokesman now, even if he is currently injured.
With Yaya Toure in what seems a precipitous decline, the City midfield is in desperate need of an overhaul and Gundogan could be the man to provide it. There are obvious concerns about his injury record but he is an intelligent operator who can take the ball from opponents, carry it forward expertly or play a neat pass; the kind of all-round operator that Guardiola loves. This could be a match made in heaven.

Expert analysis from Germany: The perfect Pep player

Tobi Hlusiak, "Gundogan is the perfect Pep player, that’s for sure. He is very good with his ball control and dribbling; he sees the pitch perfectly and is always on point with his passing. In connecting defence and attack he is right up there with the best in the business. The big concern is obviously his health. He is injured right now and misses the Euros, which doesn’t come as a surprise to anyone.
"He has dealt with a wide range of injuries in the last few years. Before dislocating his kneecap some weeks ago he missed 14 months with a back injury, that made him miss the World Cup in Brazil and almost led him to end his career. But when Ilkay played, he lifted Dortmund up one or two levels. That’s how good he is. BVB will struggle to find a replacement that comes close to Gundogan. The transfer is kind of a gamble for City, but could turn out to be a masterpiece if they can get him healthy. The good news for City: Gundogan is used to coming back from injuries, it doesn’t take him long to recover his best form."
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