“Rejoining City is such a special and proud moment both for me and my family,” Trafford said.
“I always dreamed that one day I would be able to come back to Manchester City.
“This is the place I call home – it’s a truly special football club.
“I am still very young and hungry to keep learning and improving – and I know there is no better environment than Manchester City to help make me become the best goalkeeper I can be.”
Director of football Hugo Viana added: “James is already one of the most accomplished young goalkeepers in the English game, and we are delighted to welcome him back to Manchester City.
“He has all the attributes a top-class goalkeeper requires.
“We fully believe he will be really successful and a top goalkeeper for Manchester City and the [England] national team.”
Trafford is the fourth goalkeeper at manager Pep Guardiola’s disposal, with Ederson, Stefan Ortega and Marcus Bettinelli already at the club.
Trafford will challenge Brazil’s Ederson, who has been first choice for eight years, for the number one spot.
Ederson is in the final year of his contract and has been linked with a move to Galatasaray, but last month described rumours of a departure as “99% fake news”.
City have not received any bids for the 31-year-old, but there are doubts about the future of German Ortega given the increased competition for game time Trafford’s arrival will bring.
Trafford signed for City’s academy in 2015 but did not make a first-team appearance and spent time on loan at Accrington Stanley and Bolton Wanderers.
He made 73 appearances for Burnley, including 28 in the Premier League in the 2023-24 season.
Trafford has represented England from under-17 to under-21 level, and was part of the winning European Championship squad of 2023, during which he did not concede a goal.
He received his first senior international call-up in 2024 but has yet to make his debut at that level.
Trafford is City’s sixth signing of the window after midfielders Tijjani Reijnders (initial fee of £46.5m), Rayan Cherki (initial fee of £30.5m) and Sverre Nypan (£12.5m); left-back Rayan Ait-Nouri (£31m) and Bettinelli (nominal fee).
They also spent £200m in the January transfer window to boost their squad following significant injuries.
