The fee is said to be £125 million, equivalent to around 1.6 billion kronor, reports the BBC. The fee is tied for the most expensive transfer in Premier League history - the same amount as when Swede Alexander Isak left Newcastle for Liverpool last year.
Fernández has signed a five-year contract.
"I couldn't be happier to be here, and I'm ready to take on the challenge of helping City continue to win titles," he said, according to the club's website.
However, Chelsea failed to secure a replacement. The club made several bids for Monaco's Lamine Camara and reportedly the deal was done - only to collapse.
According to transfer expert Fabrizio Romano, Chelsea are "furious" over Monaco's actions and call the process "deeply unprofessional."
