Kompany, who has signed a four-year contract, is regarded as one of the brightest central defenders in the European game.
"Vincent is one of the outstanding talents in Europe and understands the ambition of the club," Hughes said.
"We want to be a young, vibrant team with energy and technical ability. He comes into the category of the kind of young player we are trying to attract."
And it is Kompany's versatility that Hughes is most excited about.
"The thing like about him is his flexibility to play exceptionally well in a number of positions," said Hughes. "That will help the team as the Premier League is a long hard season and there will be injuries unfortunately.
"We will need players who are adaptable and Vincent will bring us that quality."
Kompany himself believes joining Manchester City is the perfect move for him at this stage of his career.
"The chance came at the right moment - this is a club with a lot of ambition," Kompany said. "That helped me make my decision and I am looking forward to playing in the Premier League.
"I just had a good feeling about this move. When you feel they are dynamic people at City, who know a lot about football, you realise you are in a good environment to improve your game."