The 19-year-old moves to Sixfields having captained City's Under-21 side. He has also represented Wales at U17 level, where he was again made skipper.
Cobblers boss Aidy Boothroyd said: "Emyr is a player we have watched over the last couple of seasons. He is a very good player and someone who I think will make a big difference to our squad.
"He comes straight into contention for the game against Exeter on Saturday.
"We would like to say thank you to Manchester City. We appreciate the fact they are willing to trust us to help develop one of their young players and we will do just that in the period Emyr spends at Sixfields. Emyr will benefit from being with us, and we will certainly benefit from having Emyr in our squad."