The 17-year-old Brazilian will join City midway through the 2020/21 campaign. The deal cannot go through until the midfielder’s 18th birthday, which is why the transfer is delayed until the start of next year.
Diego, who currently plays for Gremio B in Brazil, posted a picture of himself on Instagram signing a contract along with his parents, while the Brazilian media have revealed the details of the transfer.
City have paid a transfer fee of £2.65m upfront, another £1.75m will be added when the deal is completed in January and a further £800k in January 2022.
The deal is worth up to £21million and Rosa is likely to be loaned to Girona or another City Football Group team.