The eye-catching coup of landing Villa, Spain's all-time record national team goalscorer, from October to December was announced just minutes after the name change was made public.
The newly-rebranded Australian club stated on their website: " Melbourne City FC can today announce that New York City FC's inaugural player and Spanish World Cup winner David Villa will join the club for a period of the Hyundai A-League 2014-15 season.
"Villa, 32, who was unveiled by the Major League Soccer club as its inaugural player on Monday, will play, train and contribute to Melbourne City FC's Hyundai A-League campaign between October and December 2014 prior to the commencement of the MLS season in the United States."
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Former Barcelona frontman Villa helped Atletico Madrid win the Spanish Primera Division league title last month, and also played in the Champions League final against Real Madrid, before his move to Major League Soccer was revealed. He features in Spain's World Cup squad, and could face Australia in the Group B clash between the countries on June 23.
The renaming of the Melbourne club, founded in 2009, aligns the Australian outfit with sister teams Manchester City and New York City FC.
That announcement came from Ferran Soriano, chief executive of the clubs' parent company City Football Group, accompanied by a new badge that prominently adds sky blue to its previous red and white colour scheme.
An 80 per cent stake in the Melbourne club was acquired by Manchester City's owners, headed by Sheikh Mansour, in January.
Villa's acquisition guarantees a high profile for the team, with Soriano saying : "We are very proud to have David Villa as part of the City family and are thrilled to announce he will play for Melbourne City FC in the Hyundai A-League this season.
"The sports fans of Melbourne can look forward to seeing one of the best players in world football representing their city when David brings his rare talents to AAMI Park later this year."
Villa is looking forward to the short-term move, saying: "It's very good for me in every sense. From a football point of view it's the opportunity to play in a new league in a different country, and of course it will be ideal for me to get some competitive football in the period before the MLS season gets under way. I'm sure that playing for Melbourne City FC will be a marvellous experience."
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