The Algerian was attracted to the Blues' "ambition" and the opportunity to work under Pep Guardiola.
Speaking at his formal unveiling at the City Football Academy, Mahrez said: "It's a club who wants to win this type of trophy".
"That's why I'm here, why I made the decision to come here, because I want to be part of this".
Mahrez, who was named the CAF African Footballer of the Year in 2016 after lifting the Premier League title with Leicester City in the 2015/16 campaign, made 179 appearances for the Foxes, scoring 48 goals and assisting another 38 strikes. Pep is committed to playing attacking football, which is flawless for me, and City's performances last season were outstanding. City are a big club and have everything to try to win it.
'Every big club there are big players, ' he added.
Mahrez - who is happy playing anywhere across the attacking areas - has serious competition from Raheem Sterling, Leroy Sane and Bernardo Silva. "I am very confident about myself".
"Everyone can improve and the squad can improve, it's flawless". They broke all the Premier League records which is unbelievable, but no I never thought about this.
"Players at top clubs always have to face competition for places, it is normal for big clubs to have a lot of great players and City are a big club with a big manager", he explained. "I'm very happy and will give my best to this club". "If I'd moved sooner maybe I wouldn't have been happy, I don't know". "They were a little bit unlucky in the semi-final against Croatia".