The 30-year-old joined the Citizens from Juventus in the summer of 2019 and won the Premier League title and EFL Cup in each of his first two seasons at the Etihad Stadium.
Cancelo, who was also named in the PFA Premier League Team of the Year on two occasions, chipped in with nine goals and 21 assists in 154 appearances for Man City across all competitions.
He was regarded as a key cog in Pep Guardiola's machine, operating in a hybrid full-back role, but after playing 26 times for the Citizens during the 2022-23 campaign, he made a surprise loan switch to Bayern Munich following an alleged fallout with Guardiola.
Cancelo then spent the 2023-24 season on loan at Barcelona, where he contributed with four goals and five assists in 42 matches, and the Catalan giants were keen to sign the Portugal international on a permanent basis.
However, Barca's well-documented financial problems prevented them from pursuing a permanent move for Cancelo and Saudi giants Al-Hilal have since swooped in to secure the services of the full-back.
Begiristain: 'Cancelo was a huge influence on the pitch'
Cancelo moves to the Middle East for a reported €25m (£21.1m) and has penned a three-year contract worth around €15m (£12.7m) per season.
Before finalising his exit from Man City, Cancelo told the club's official website: "I would like to wish everyone at City continued success in the future. I had many very special moments during my time here at this great club.
"I would like to thank my teammates, the coaches, all the staff at City and the fans for everything during my time here."
Director of Football Txiki Begiristain added: "I would like to thank Joao for his contribution during a remarkable period at City.
"He made a big impact in title-winning campaigns and was a huge influence on the pitch. I would also like to give him my best wishes for the future and the rest of his career."
Cancelo is the latest Man City player to swap the Premier League for the Saudi Pro League after Riyad Mahrez and Aymeric Laporte, who joined Al-Ahli and Al-Nassr respectively last summer.
The full-back becomes Al-Hilal's first signing of the summer under manager and compatriot Jorge Jesus, and will join a squad filled with stars including Portugal teammate Ruben Neves, Neymar, Aleksandar Mitrovic, Sergej Milinkovic-Savic and Kalidou Koulibaly.