The 21-year-old will link up with the rest of the squad on Thursday for training and is available for Saturday's game at home to Barnsley in the Championship.
Wabara recently enjoyed a successful spell with League One side Oldham and scored in their historic 3-2 FA Cup win against Liverpool last weekend.
The England Under-20 international has made one appearances for City, coming on as a substitute against Bolton in 2011.
He tweeted: "Delighted to have signed for Blackpool on loan until the end of the season.
"Once again thanks to all the Oldham fans, staff and players you have been brilliant! Forever in my heart."
The full-back is Blackpool's second signing of the January transfer window following the arrival of striker Matt Derbyshire from Nottingham Forest last week.
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