Hosts Bayern Munich, Italian giants AC Milan and Brazilian club Sao Paulo are the other teams taking part in the competition at the Allianz Arena on 31 July and 1 August.
The event means City may come up against former players Mario Balotelli and Nigel de Jong, now at Milan, and also Bayern's Jerome Boateng.
City's chief commercial and operating officer Tom Glick said: "We are delighted to have been invited to take part in the Audi Cup and to be competing with some of the best teams in the world.
"This tournament forms a significant part of our pre-season preparations and we are very much looking forward to it."
City are also due to take part in the Barclays Asia Trophy in Hong Kong in July, along with Tottenham, Sunderland and South China FC.