He is the Club's third signing of the summer, with Fernando and Bacary Sagna also joining City in the past month.
Caballero told mcfc.co.uk: “I am very happy, and really looking forward to the start of pre-season and performing well to help the team.
“This is a new challenge and a new league for me. I have been doing well in the previous years and my goal is to go on and hopefully perform at the same level for City.
“I know I am coming to a big club with a very good goalkeeper. City already have a great goalkeeper in Joe Hart, but I will try and compete for the no.1 spot. I will do my best in the training sessions.”
Caballero won the u20 FIFA World Cup with Argentina in 2001, and was part of the squad that triumphed at the 2004 Summer Olympics as a 22-year-old, but the Premier League represents a new challenge for the Santa Elena-born stopper.
“I’ve always loved the Premier League, I watched it as a child and I always liked the style of play here,” he said. “When I was 19 I came to play a friendly against England and I really liked how they played and how passionate the fans are. It’s a big step in my career and a dream realised to play in the Premier League.
"Hopefully we can have many happy times together.”
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