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The 21-year-old has signed a five-year deal with the Barclays Premier League champions for an undisclosed fee.
Rodwell, who can play as a defensive or attacking midfielder, broke into Everton's reserve team as a 15-year-old and played for the Toffees at senior level before his 17th birthday.
He made 51 League appearances for David Moyes' side and scored four goals.
"I relish the opportunity of playing with some of the best players in the world"
- Jack Rodwell
"I relish the opportunity of playing with some of the best players in the world and continuing my development," Man City's new No17 told the club's official website.
"It will be an amazing experience to make my debut in front of them if I am selected to play next weekend.
"The hard work starts today as I start to help contribute to the club winning more silverware. The season has started really well with the Community Shield win."
The former England Under-16 captain paid tribute to Moyes after completing his move.
"I would like to place on record my thanks to everyone at Everton Football Club. The Manager David Moyes has been brilliant for me and helped make me the player that I am today.
"I have a special relationship with the Chairman, Mr Kenwright, who did not want me to leave but this is too good an opportunity for me to refuse."
Rodwell has won two full England caps, making his debut as a substitute against Spain and facing Sweden in a friendly.
He has also been included in Roy Hodgson's England squad to face Italy on Wednesday.
City open their title defence at home against Southampton on Sunday.