Itakura initially joined Groningen in January and City have now agreed to extend the arrangement for the new season.
"We were able to make excellent arrangements with Manchester City," technical director Mark-Jan Fledderus said in a short response to RTV Noord on Friday.
"Ko is a year further in his development and is an important strength for us.
"He knows our way of training and what the trainers expect from him."
The defender was capped by Japan earlier this year and now has played for his country three times.