He has made 14 senior appearances in two years since, but three of those were starts.
It is worth noting that Diaz is highly rated by both clubs, but wasn't receiving enough playing time under Pep Guardiola at City, prompting interest from Real Madrid.
Guardiola addressed that speculation last week, saying that his future is out of the club's hands.
"This is the most important day in my life".
"I was clear last week when I spoke about it".
At the presentation club president Florentino Perez stated: "We keep working to reinforce our squad with the best talent...."
How seriously should Jurgen Klopp take Wolves in the FA Cup?
The Premier League giants will now face-off in north London in the FA Cup fourth round later this month. Winning clubs will receive £180,000 after The FA doubled the prize fund at the beginning of the season.
The European champions will pay an initial £15.5 million for the Spain Under-21 attacking midfielder with a further £6.5m payable in add-ons depending on the players success at the Bernabeu.
After the medical examination to be held tomorrow, Monday 7 January, the player will be presented at 1:30 pm in the honor box of the Santiago Bernabéu stadium.
City are said to be "delighted" with the financial package for a player who is out of contract in the summer.
The agreement includes a 15 per cent sell-on clause, however English media claims of an anti-United clause have been dismissed, says AS.
According to the Independent, that would rise to 40% if Los Blancos opt to sell Diaz on to "another Manchester club" - seemingly created to prevent a future move to rivals United. Surely that's a clause that has been very rarely used in the past.