"Nolito is with Sevilla for the next three seasons, until June 2020", the club said in a statement on their website.
It brings an end to a disappointing season-long spell at City, where he scored just six times in 30 appearances and never gained the favour of manager Pep Guardiola.
Nolito will not go to the United States with City but instead head straight to Japan where he can link up with Eduardo Berizzo's men.More news: Besiktas fans besiege Diego Costa's Instagram
Nolito only started nine Premier League matches under Guardiola last season and stressed last month that his priority was a move back to Spain, giving him the best possible chance of selection for next year's World Cup.
Nolito has scored six worldwide goals in 16 appearances, but struggled to nail down a regular first-team place under City coach Pep Guardiola last term.
Sevilla have been busy this summer as they prepare for the Champions League playoff round, with Luis Muriel, Ever Banega, Guido Pizarro and Sebastian Corchia already joining, while Vitolo, Adil Rami and Vicente Iborra have all departed.