Black Cats boss Gus Poyet swooped for the 27-year-old Romanian, whose contract was not renewed by City at the end of the season.
Pantilimon said: "It is a great privilege and honour to join a club like Sunderland.
"They have an amazing history and tradition and, of course, passionate fans.
"When I left Manchester City it was important that I chose a club with good ambition and a manager who has the hunger and desire to take the team forward.
"After speaking with the boss, I knew this was the right place and he was the right man. I can't wait to start."
Sunderland's sporting director Lee Congerton told the club's official website: "Competition for places is healthy and brings out the best in players.
"We already have a great goalkeeper in Vito Mannone and another one now in Costel.
"Add to this youngster Jordan Pickford, who recently signed a long-term deal and we have a very strong stable of goalkeepers, which is vitally important in the top flight."
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