The France international brings a difficult two-year spell in Manchester to an end, having signed arrived for a reported fee of £42m from Porto.
Mangala, who was the most expensive defender in British transfer history, struggled for consistency during his time at the Etihad Stadium.
The 25-year-old was frequently criticised for underwhelming performances, despite becoming a regular in Manuel Pellegrini’s side by the end of last season.
Pep Guardiola, Pellegrini’s successor, indicated that Mangala would not feature in his first-team plans earlier this summer and has now sanctioned his loan move to Mestalla.
Valencia were in the market for a new centre-back following the departure of Shkodran Mustafi to Arsenal.
Mangala, who began his senior career at Standard Liege, will now hope to rebuild the reputation he had earned for himself while playing at Porto.
The 25-year-old won two Primeira Liga titles with the Portuguese side and was named in Uefa’s Europa League team of the year for the 2013/14 season.
Mangala makes a temporary move away from City on the same day as goalkeeper Joe Hart and attacking midfielder Samir Nasri, who have joined Torino and Sevilla on loan respectively.