Wales international Matondo, 18, has joined Bundesliga side Schalke on a four-year deal.
He follows Jadon Sancho in leaving the Etihad for Germany, and could see his career flourish just as well.
Winger Matondo never made a first-team appearance for City and trained with the seniors only when they were depleted by injuries or international call-ups.
He is following in the footsteps of Mesut Ozil by going to the Veltins-Arena, where City will be for the first leg of their Champions League last-16 clash on February 20.
Pep Guardiola's side will get ten per cent of any sell-on for the player and there is thought to be a buy-back clause.
But for now Matondo is thinking only of finally getting some game time.
He said: "Before coming here I already knew a bit about Schalke 04: Mesut Özil, Ivan Rakitic and Leroy Sané all took big steps in their careers here.
"As well as that, I had some good chats with the coach and my new teammates only had good things to say.
"The Bundesliga is a great league too. Schalke 04 is the right decision for my career and I’m happy to now be a part of this club and their future plans."
City also lost Brahim Diaz in this window, who joined Real Madrid in a deal worth around £15m.
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