Ex-Preston North End midfielder Joyce, 52, had four months in charge of Latics in the Championship last season after eight years overseeing the United second string.
Joyce – who had spells as a player with Bolton and Burnley – also had a spell as player-manager at Hull and held coaching roles at Leeds and Antwerp.
His latest move sees him take charge of Manchester City’s sister club in Australia’s A-League.
Joyce said: “I am delighted to be joining Melbourne City Football Club at this time in its evolution.
“The people at the club, their vision and their values, together with the opportunity to help develop and build this team to its full potential, meant that this was an offer which was impossible to turn down.”