Savic, who was being tracked by Arsenal earlier in the summer, follows Gael Clichy in joining City this week ahead of their first Champions League campaign. He moves for an undisclosed fee.
The 20-year-old Montenegro international, who was part of the side which held England to a goalless draw at Wembley earlier this year, played for Partizan in Europe's elite competition last season.
He operates either in the centre or the right of defence.
There had been reports that City would have to wait until after Partizan played FK Skendija in a Champions League qualifier later this month. But if Partizan then qualify for the group stages of the competition the player would be ineligible for City until the latter stages.
As Savic has only six international caps to his name he was not automatically entitled to a work permit, but he has now been approved by the Home Office.
Savic stated he is very happy to be a city player and was already welcomed by Aleksandar Kolarov.
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