Manchester City included several clauses in their sale of Jeremie Frimpong to Celtic.
The Manchester Evening News says the 18-year-old secured a permanent move to the SPL champions on Monday after spending half of his life with the Blues in their academy.
Frimpong impressed last season as the Under-18s made it to the FA Youth Cup final and the Under-21s reached the quarter-finals of the Checkatrade Trophy but interest from Neil Lennon proved too much for him to turn down.
Celtic have paid an initial £350,000 for Frimpong and there are also up to £650,000 in potential payments which would take the total sum up to £1m. City will also receive 30 per cent of any fee should Celtic sell the youngster in future, but there is no buyback clause in the deal.