Berrada has been chosen to succeed Richard Arnold in a major coup for INEOS ahead of their 24 per cent stake being ratified. Arnold left the club last year ahead of Sir Jim Ratcliffe & Co.'s arrival.
Berrada is considered one of the key figures behind City's recent success both on and off the field, peaking last season with the Premier League, Champions League and FA Cup treble - matching United historic achievement from 1999.
Berrada, who was previously at Barcelona before moving to Manchester, will take a leadership role overseeing both the football and business side of the club and sit on the club's board of directors.
The Glazer family, still majority owners, reportedly approved the pursuit of Berrada, who is currently chief football operations officer at City Football Group.
A United statement read: "The Club is determined to put football and performance on the pitch back at the heart of everything we do. Omar’s appointment represents the first step on this journey.
"As one of the most experienced football executives at the top of European football, Omar brings a wealth of football and commercial expertise, with a proven record of successful leadership and a passion to help lead change across the Club.
"He is currently serving as Chief Football Operations Officer for City Football Group overseeing 11 clubs across five continents and, prior to this, held senior roles at Barcelona.
"Omar’s start date will be confirmed in due course; in the meantime, Patrick Stewart will continue as interim CEO."
A City statement read: "Manchester City Football Club can confirm that Omar Berrada has resigned from his role as chief football operations officer at City Football Group.
“The club understands his decision to look for a new challenge and he leaves with our thanks and best wishes.”
The Athletic report that Berrada has previously rejected a CEO job at another Premier League club, along with similiar roles at MLS teams and a major NFL franchise.