Sterling , who will wear the number seven shirt, has become the club’s record signing and the most expensive English footballer ever after sealing a move which will be worth up to £49 million (€70m).
A statement released on City’s website read: “Manchester City are delighted to announce Raheem Sterling has joined the club on a five-year deal.
“The 20-year-old England international’s transfer is a club record fee for an English player and he also becomes City’s record signing.”
The announcement came after Sterling had passed a medical and completed the remaining formalities of the deal.
Pellegrini said: “Raheem Sterling is one of the best attacking players in world football.
“He is a young player with outstanding ability and I am sure the Manchester City fans will be very excited about seeing him in action for the team.”
News of Sterling’s departure from Anfield was also confirmed by Liverpool on their website.
It said: “Liverpool Football Club can confirm Raheem Sterling has completed a transfer to Manchester City. The 20-year-old departs Anfield after 129 appearances and 23 goals for the Reds.
“Liverpool FC wishes Raheem well.”
City’s interest in Sterling has been an open secret for some time, but the Reds were desperate to retain his services as they braced themselves for an approach.
However, they were fighting a losing battle from the moment he told boss Brendan Rodgers he wanted to leave following his return for pre-season training, and his request not to be included in the party for the club’s pre-season trip to Australia and the Far East sparked claims of a bust-up, something the Jamaica-born attacking midfielder’s camp has strenuously denied.
Liverpool rejected a series of offers from City as they held out for their valuation of their prize asset, but the two clubs eventually reached agreement and proceedings moved on swiftly with both now well into their preparations for the new campaign.
Meanwhile, Manchester United have been told they will have to pay at least £35m (€50m) if they want to sign Robert Lewandowski from Bayern Munich.
As it stands, Wayne Rooney is the only senior striker on United’s books after the club sold Robin van Persie to Fenerbahce and rejected the opportunity to sign Radamel Falcao from Monaco.
Javier Hernandez is surplus to requirements and 19-year-old James Wilson is not ready to become a first-team regular despite a promising start to his career at Old Trafford.
Lewandowski has been touted as a man who could ease the striker shortage at United, but the player’s agent Cezary Kucharski says his client will not come to Old Trafford on the cheap.
Kucharski said: “I think it would have to be a very high offer, definitely higher than €50m for Bayern to consider selling.
“Every year he is an even better player and plays at a higher level and that is very important for other clubs because he has credibility and guarantees at least 30 goals a season.”
Kucharski does not seem optimistic about United’s chances of signing his client.
“There must be a signal from the club, from Munich,” Kucharski said. “There is no such signal so we are not thinking about it.
“There is no reason, apart from money to be honest, to even think about it.”
For his part, Van Persie insists he bears no ill-feeling towards United for selling him to Fenerbahce.
Van Persie was unveiled as a Fenerbahce player yesterday at a press conference at the Sukru Saracoglu Stadium in Istanbul.
The 31-year-old Dutchman has been handed a three-year contract with the Turkish giants.
Twelve months ago, Van Persie was tipped to take over the captaincy at United, but manager Louis van Gaal has once again demonstrated his ruthless streak by disposing of a man who scored just 10 goals last season.
Van Persie rejected the opportunity to fire a parting shot at Van Gaal at his unveiling.
Indeed, the former Arsenal striker was at pains to thank the club for allowing him to move to Turkey.
“From my side, there are no hard feelings with how it went. It’s part of football, it’s part of life,” Van Persie said.
“I had a good moment with the players the day before I came to Istanbul so that was special.
“Then you see that everyone really appreciated my time there, that was important for me.”
Van Persie enjoyed a stellar debut season with United following his move from Arsenal in 2012.
He scored 30 goals to help Alex Ferguson win the Premier League in the Scot’s final year in charge of the club.
But, after Ferguson’s departure, he struggled under David Moyes and there was no improvement following the arrival of Van Gaal despite enjoying an encouraging World Cup under the former Bayern Munich and Barcelona manager.
Van Persie only scored twice after the turn of the new year and he knew he was destined to leave the club.
“I could see it coming, if I’m really honest,” he said of his Old Trafford exit.
Fenerbahce supporters gathered at the airport to greet Van Persie yesterday and thousands gathered outside the stadium before the press conference to announce his move.
“I am very glad I am here,” Van Persie said.
“There were 18,000 fans here (for the arrival), which is unbelievable for me.
“It’s the first time I have experienced something like that.”