Diamanti will also be an assistant coach for the first team.
In an online statement, the club said his appointment “is set to bring extensive knowledge and experience to the Club’s already successful Academy program”.
“It was an easy decision for me to join Melbourne City and I’m really excited to start the next chapter of my life and football journey,” Diamanti said.
“I chose the Club for the project that was presented to me and I can’t wait to start, and to make myself available to everyone.
“I will approach my new role at City with the same qualities that have accompanied me all these years on the pitch; passion, humility and respect.
“I look forward to sharing my experiences and passion with the young players, giving my best to help them maximise their potential both on and off the pitch, all while never losing the joy that comes from this wonderful sport.”
Diamanti played 82 games in the A-League, scoring 11 goals.
