The French international has signed a five-year contract with the club and will wear the number 22 shirt vacated by Gael Clichy at the end of the season upon his release.
"I am absolutely delighted to be joining Manchester City. They are one of Europe's leading Clubs and in Pep Guardiola they have a manager committed to playing attacking football," Mendy told ManCity.com.
"I am sure that over the next few years we will be successful."
Director of football Txiki Begiristain added, "Benjamin has all the qualities we are looking for in a full-back. For such a young player, he has a wealth of top-level experience.
"He is undoubtedly one of the world's best full-backs, our number one target in this position. We are all delighted to have him here at Manchester City.
"I'm sure he will prove a fantastic addition to the squad."
It is thought that the £52m for Mendy marginally surpasses the sum spent on Walker, making the former Marseille man the most expensive defender in history.