The Argentinian joins up with former Blues boss Enzo Maresca at the Etihad Stadium with Xabi Alonso left short on numbers in midfield for the 2026/27 season.
Jordan Henderson has joined following a free transfer from Brentford alongside Fernandez's international teammate Valentin Barco.
However, Henderson is expected to be out of action for another month, after suffering a broken arm on 2026 FIFA World Cup duty with England this summer.
That could persuade Alonso to dip into the free transfer market and he's reportedly considering a move for Henderson's old Liverpool colleague Gini Wijnaldum.
The veteran Dutchman, who won the Premier League and UEFA Champions League at Anfield, is currently without a club after leaving Saudi Pro League side Al-Ettifaq in June.
He could join on a short-term contract until the end of the campaign, if Alonso is convinced by his fitness for a Premier League return.