The Brazil international has committed to a long-term contract in North London and becomes Arsenal's fourth summer signing.
Jesus comes to Arsenal with a big reputation, having struck 95 goals in 234 appearances for Manchester City after joining Palmeiras in January 2017.
He went on to win four Premier League titles, one FA Cup and three League Cups at the Etihad Stadium but his position came under threat following Erling Haaland's arrival from Borussia Dortmund earlier this summer.
Jesus was keen on the move to reunite with Arsenal boss Mikel Arteta, whom he worked with while the Spaniard was assistant to Pep Guardiola at the Etihad Stadium a couple of seasons ago.
Jesus will wear the number nine shirt vacated by Alexandre Lacazette, who has rejoined Olympique Lyon as a free agent.
Arsenal technical director Edu told the club website: “We are delighted that we have secured the transfer of Gabriel. Everyone who knows football well, knows the qualities of Gabriel Jesus.
"Gabriel is a player who we have admired for a long time now. He is 25 years old and an established Brazil international who has consistently demonstrated that he is a player at a very high level. We look forward to seeing him join up with his new teammates ahead of the new season. We all welcome Gabriel to Arsenal.”
Arteta added: “I’m very excited. The club has done a tremendous job to recruit a player of this stature. I know Gabriel personally very well, and we all know him well from his time in the Premier League and being really successful here.
"This is a position that’s been on our radar for a long time now and we have managed to get a player that we all wanted, so I’m really happy.”
Arsenal, who will play Europa League football next season, have already signed Brazilian Marquinhos, goalkeeper Matt Turner and Portuguese playmaker Fabio Vieira.
