Charles has signed a five-year contract that ties him to the Etihad Stadium through to the summer of 2031. The move is understood to be worth an initial £3million guaranteed, with add-ons capable of pushing the overall package above £10million.
For the 20-year-old, the transfer also marks a homecoming: he was part of City's academy before leaving to join Sheffield Wednesday as a 16-year-old in the summer of 2021, and his elder brother Shea is a former City player.
Charles made his senior professional debut for Wednesday in January 2024 and went on to make 36 appearances in all competitions for the south Yorkshire club, establishing himself as one of the Championship's more highly regarded young goalkeepers. He has also won 12 caps for Northern Ireland to date.
Speaking after completing the move, Charles said: "To be back at Manchester City is a very special and proud moment both for me and my family. I know first hand what a special club City is and I am so excited about looking to the future.
"City take the development of young players very seriously so I know that my loan to QPR will only help me grow and improve as a player too. I'll now give everything I can for a successful season in the Championship before hopefully returning to Manchester a better goalkeeper."
Director of Football Hugo Viana added: "Pierce is someone whose progress we have been following closely, and we are delighted to welcome him back to Manchester City. Pierce has already learned a lot during his time at Sheffield Wednesday but is still very young and hungry to now further progress and develop.
"He also knows the club and is very much aligned with the values we all share. We are very happy to have secured Pierce's signing and are excited to now help in his future career development."
Charles becomes new head coach Enzo Maresca's latest addition to a City goalkeeping department that remains under review as the Italian assembles his squad for the 2026/27 campaign, with the loan to QPR designed to give the young shot-stopper the sustained senior football his development requires.