The contract, which will come into effect in the 2013-14 season, replaces the Premier League leaders’ existing deal with Umbro, who are now owned by Nike.
“We’re excited by the opportunity to further develop the relationship between City and Nike Inc, which builds on the successful partnership the club has already enjoyed with Umbro, and reflects both the ambitions of the club and the Nike brand’s position within the world of football”, commented Nike Brand President, Charlie Denson.
City’s previous kit deal with Umbro was worth £6 a year, and the huge increase shows how the clubs improvement on the pitch has increased the commercial side of the club.
The £20m a year Niek deal is the third highest for a Premier League club. Liverpool’s £25 million-a-year deal with the American manufacturer Warrior, is the biggest in the Premier League, while Manchester United’s current £23.5 million with Nike which expires in 2015, is just behind their rivals.
The agreement with Nike follows in the footsteps of City’s 10-year, £350m stadium naming-rights and infrastructure sponsorship agreement with Etihad Airways.
City, who posted a loss of £197m last year, the biggest English football has ever seen, the new deal is a major boost to City’s hopes of complying with UEFA’s new Financial Fair Play (FFP) rules.
FFP, which also comes into effect in 2013-14, essentially means clubs in Europe can only spend what they earn, and face the threat of expulsion from European competition if they are found to be spending more than they bring in annually.