The Frenchman travelled to Merseyside to undergo a medical late this afternoon and concluded the necessary paperwork in time to be registered as the club's third signing of the January transfer window.
The 26-year-old has been drafted in to offer a left-footed defensive option to add to that of Ramiro Funes Mori who is still some way off full fitness following surgery on his knee.
Mangala arrived at the Etihad Stadium from Porto three and a half years ago in a massive £31.8m deal that eventually ballooned to £42m due to the player's complicated image rights.
The 26-year-old has struggled to justify the price tag with City and has fallen down the pecking order there behind the likes of John Stones, Vincent Kompany and Nicolas Otamendi. He spent last season on loan at Valencia where he made 30 league appearances.
Pep Guardiola's decision to break the Manchester club's transfer record this week for Aymeric Laporte will only have lessened Mangala's chances of getting game time this season.
Everton have been without a left-sided defender since Funes Mori and Leighton Baines both succumbed to injuries but have now moved to shore up that part of the squad.
The deal with City is reported to include an option to make the move to Goodison permanent in the summer for around £15m, with a loan deal that will see the Blues pay an initial fee of around £1m.