The former Chelsea player joined New York City, owned by Manchester City and baseball giants New York Yankees, on July 24.
It was thought Lampard, 36, had agreed an autumn switch to join Manchester City's sister side Melbourne City where he would play alongside New York City teammate David Villa.
But the news of his decision to join Manuel Pellegrini's side will no doubt cause huge disappointment for Australian football fans.
It is not clear whether Lampard would feature regularly in City's first team but the midfielder will be keen to sharpen his fitness before the start of the MLS campaign in March.
City face Chelsea on September 21 in the Premier League and it is possible Lampard will be allowed to sit out of the clash. He suggested last year he would not play for another top flight club in England.
He said in May 2013: "I can't imagine playing for anyone else after being 12 years at Chelsea. I've got a lot of respect for a lot of other Premier League clubs, particularly the top ones, but I'm not sure I could have done that."
Lampard scored 211 goals in 649 matches for Chelsea, becoming the club's record goalscorer but was released by Chelsea at the end of the season.
Lampard, who signed a two-year deal with New York City, is still considering his England future.
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@crow...I agree there (although I think it's safe to assume a defender will arrive before the end of the window). It's hard to see him getting too many minutes, perhaps he can teach our players how to take penalties though!- bernsteinforpm