The Italian has already worked for the Cityzens in his career, leading their Elite Development Squad to a Premier League 2 title in 2020/21.
His success there saw him become head coach of Parma before rejoining City as one of Pep Guardiola's assistants.
"Manchester City is a club I know very well and to have the chance to manage this team is a brilliant opportunity for me," Maresca said.
"City is an incredibly well-run football club. Everything they do is innovative, planned and purposeful. For a manager, that is a dream situation. It provides the consistency I need to do my job effectively.
"This will be my third spell here. I know this club, I know the demands and I know the expectations. The quality of the people who work here is what makes it so special, and I want to thank them for showing faith in my ability.
"I cannot wait to start coaching the players. I want us to win, play good football and enjoy the pressure of representing Manchester City."
Maresca's first senior management role in England came at Leicester City, where he won the Championship in his sole season in charge.
A stint with Chelsea followed; Maresca won the UEFA Conference League during his spell with the Blues but ultimately departed on January 1st, 2026.
He was widely tipped to be Guardiola's successor at City when the time came and will now lead the eight-time Premier League champions for the 2026/27 campaign.
Chelsea compensated
City, meanwhile, will reportedly pay Chelsea around £17 million in compensation for Maresca as part of the appointment.
In a statement, the Blues revealed they were aware of Maresca's "strong desire" to succeed Guardiola at City before his sudden resignation with three and a halfyears left on his contract.
They confirmed a financial settlement was reached with City, while Maresca made an undisclosed compensation payment of his own.
A Chelsea statement read: "It became clear to us that it was his strong desire to succeed Guardiola and that he was fully committed to pursuing the opportunity, despite the fact he was under a long-term contract which he had no right to terminate.
"In December 2025, our head coach unexpectedly and abruptly resigned from his position. Obviously, we felt let down as we believed that his head and heart were focused on another club and another opportunity, despite having just arrived at Chelsea the year before.
"No club wants to change its head coach midway through a season. However, in light of his decision not to continue fulfilling his responsibilities through to the end of the season, the club was left with no choice but to protect our players, our supporters, and the badge and accept his resignation.
"In the circumstances and given the mutual respect between clubs, a confidential settlement has been reached with Manchester City, which includes the payment of compensation. A confidential settlement has also been reached with the former head coach under which he will pay compensation."