The 17-year-old was attracting interest from the top clubs in England as he had set his sights on leaving the City. Apart from United, the two north London clubs, Arsenal and Tottenham Hotspur were interested in the teenager.
According to the Manchester Evening News, Sancho was unhappy with Pep Guardiola's decision to omit him from City's squad for the pre-season tour. Following this, he decided to leave the Manchester club as he had reservations about getting regular playing time in the first team.
United were open to the idea of concluding the deal past the deadline day. However, the player's agent was keen on completing the transfer on Thursday. City were also not interested in letting Sancho join their direct rivals, despite firm interest from United, Arsenal and Tottenham.
The England Under-18 forward left the Etihad and completed a move to Borussia Dortmund on 31 August. He has been handed the No 7 shirt at the Signal Iduna Park, which was vacated by Ousmane Dembele following his switch to Barcelona.
A statement on Dortmund's official website read, "DFB Cup holders Borussia Dortmund have signed 17-year-old English youngster Jadon Sancho, who has been coveted by a number of top European clubs, on the final day of the transfer window."
"BVB and Sancho's former club, Manchester City, agreed on the terms of the transfer today. Sancho, who has signed a long-term contract with the eight-time German champions, will immediately link up with the first-team squad."
Dortmund sporting director Michael Zorc expressed his delight after his side secured Sancho's services.
"We're delighted that Jadon Sancho, who is at present one of the hottest prospects in European football, wants to and will play for Borussia Dortmund," Zorc told Dortmund's official website.
"We're convinced that we'll be able to help this very young player to further develop his game and to make him into a valuable addition to our team in the medium-term."