Lille have accepted an initial fee of £81.4 million, with a further £4.2 million in potential add-ons, completing a protracted pursuit that Manchester City had been chasing for much of the summer as they moved to strengthen central midfield following the departures of Rodri and Tijjani Reijnders.
Rodri left for Barcelona in a deal worth £65 million, while Reijnders was sold to Saudi side Al-Qadsiah for £52 million, leaving Enzo Maresca short of options in the middle of the park.
City had already brought in England international Elliot Anderson from Nottingham Forest for £116 million earlier in the window, and Bouaddi's arrival takes their central midfield outlay for the summer past £250 million.
The Morocco international emerged as one of the standout performers of the 2026 World Cup, helping his country reach the quarter-finals before their elimination by France, and became the youngest African teenager to make five appearances at the tournament.
He had previously represented France at youth level, even captaining the under-21s, before committing his international future to Morocco in May.
City remain interested in Chelsea's Enzo Fernández, though it is unclear whether a separate deal for the Argentine can be reached before the window closes.
The club open their Premier League campaign at home to Bournemouth on Sunday, having lost last weekend's Community Shield to Arsenal, with Bouaddi unlikely to be involved so soon after finalising his move.