Kovacic joined Chelsea from Real Madrid for £40m in July 2019
Manchester City have signed Croatia midfielder Mateo Kovacic from Chelsea for an initial £25m.
The deal for the 29-year-old is also worth a possible £5m in add-ons and he has signed a four-year contract, reports BBC.
Kovacic is City's first signing of the summer after they won the Treble of Champions League, Premier League and FA Cup titles last season.
"This is a brilliant move for me, and I cannot wait to get started with City," said Kovacic.
His arrival follows the club announcing Ilkay Gundogan's free transfer to Barcelona, while City have had a £90m bid - thought to have included an £80m initial payment - for England midfielder Declan Rice rejected by West Ham.
Kovacic added: "Anyone who has watched this team under [manager] Pep [Guardiola] knows how good they are - for me, they are the best in the world. The trophies they have won are clear for all to see, but they are also the best footballing side out there.
"To be joining this squad really is a dream for any footballer. I still have plenty of learning and developing to do, and I know under Pep's management I can become a better player, which is really exciting for me.
"My plan now is to rest for a few weeks before coming back to Manchester to prepare for the new season. I want to help this club stay at the top and win more trophies."
Kovacic joined Chelsea from Real Madrid in August 2018, initially on loan, before signing a five-year deal.
He made 37 appearances for the club in a turbulent campaign last season as they finished 12th in the top flight.
Kovacic was part of the Chelsea side who won the Champions League in 2021, coming on as a late substitute in the 1-0 final win over City.
At international level, Kovacic has made 95 appearances for Croatia, playing every game as they finished third at the 2022 World Cup.
"It was a very simple decision to bring him to City because he has the tactical and technical qualities we are looking for in a midfielder," said City director of football Txiki Begiristain.
"He is someone we have monitored for a very long time and always we were impressed whenever we watched him."