The three-year arrangement will see Black Aces, based in the Mpumalanga province, become City's "official regional school of football partner".
The move comes after the recent announcement of other international projects such as the launch of a New York-based team in Major League Soccer and the successful establishment of an Academy in Abu Dhabi.
As part of the Black Aces deal, City will deliver coaching programmes to local children and the Academy sides will also have the opportunity to travel to and play in Manchester.
The programme will follow the same training techniques and philosophies of the City first team, in keeping with the "holistic approach" the club are developing towards all aspects of their football.
City will also set up a coach education programme at the club.
Patrick Vieira, head of City's elite development squad, "It's a privilege for Manchester City to be part of South Africa's youth football development by passing on our expertise to the Black Aces coaches, at a time when the country is fast becoming a force in world football.
"Through shared learning, both clubs can work together in order to provide children with a holistic football experience that places equal importance on football and education."
City are also due to visit South Africa as part of their pre-season programme this summer, playing two games in July.