Nice finished eighth in the French top flight but are expected to lose Mario Balotelli, who scored 18 league goals last season but is out of contract at the end of the month.
The 55-year-old Spaniard replaces Patrick Vieira, who has departed the MLS side after two and a half seasons to take over Ligue 1 side Nice.
He returns to Ligue 1 - 23 years after leaving Cannes to join Milan in 1995. I am very happy to be here.
Domènec Torrent, who has been Pep Guardiola's assistant coach since 2007 at Manchester City, Bayern Munich and Barcelona, will be the new coach of New York City FC, the club announced on Monday. New York City is now second in the Eastern Division, only two points behind the leaders, Atlanta United.
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Assistant coach Christian Lattanzio, performance coach Kristian Wilson and physical performance coach Matt Cook have also left NY to join Vieira at Nice.
It is unlikely that Torrent will take any of the City staff to NY with no announcement of the coaching team yet to be announced.
"From the beginning, City Football Group and its leadership, particularly our Chairman Khaldoon Al Mubarak, Brian Marwood, Ferran Soriano and Marty Edelman have believed in me and have helped guide me through the last eight years of my career - starting with my time as a player and ultimately culminating with my first opportunity to manage a First Team".
There was a point where he was touted to be in the frame for the Arsenal job, but today Patrick Vieira has made his first foray into the world of European club management at OGC Nice.