Manchester City has completed the signing of Brazilian right-back Danilo from Real Madrid for a reported fee of £26.5 million ($43.5 million).

The 26-yeard-old defender has signed a five-year deal with Pep Guardiola's side as it seeks to strengthen its squad ahead of the new season.

“I am very, very happy to be joining Manchester City,” Danilo told mancity.com after agreeing personal terms and passing his medical.

“There has been strong interest from other Clubs, but it has always been my ambition to play for Pep Guardiola. As soon as I heard of his interest, I knew immediately I wanted to be a City player.

“I can’t wait to get started and I’m looking forward to getting to know my new teammates over the coming weeks.”

Danilo also said he wants to end Manchester City's wait to win the UEFA Champions League after joining from the holder.

After joining Madrid from Porto in 2015, Danilo won European club football's top prize in his first season with Zinedine Zidane's men, before helping them retain the trophy as well as win LaLiga, the FIFA Club World Cup and the UEFA Super Cup last campaign.

City was beaten by Madrid over two legs in the UEFA Champions League semi-final in 2016 but now Danilo wants to deliver the English club's first European silverware since 1970.

"I'm really looking forward to the challenge and would love to win the Champions League with Manchester City," he told the City's official website.

Danilo is the second full-back City has signed in the transfer window following Kyle Walker's arrival from Tottenham Hotspur. Left-back Benjamin Mendy is also set to join from Monaco after City allowed Aleksandar Kolarov, Pablo Zabaleta, Gael Clichy and Bacary Sagna to leave the club.

Given the expected competition for places between the new arrivals at full-back, Danilo's versatility is a bonus for City. He confirmed Guardiola believes he can do a job at a number of positions.

"I don't have a favourite position," Danilo added. "I am used to playing as a right-back, but any time I'm on the pitch in the starting XI, I'm always happy.

"He [Guardiola] told me I'm ready and I can play in several positions, right-back, left back, midfield. I just hope to help him out as he expects."

On playing in the Premier League, Danilo said: "It is a competition I always liked, I always wanted. So I'm very excited to start."

Danilo was released from the Spanish champion's pre-season camp on Sunday (AEST) in order to complete the deal, which remains subject to a work permit for the Brazilian.

He is the Premier League club's fifth signing of the transfer window, after Bernardo Silva, Ederson, Douglas Luiz and Walker.