The 31-year-old impressed during his debut A-League season, scoring six goals in 24 matches on his way to winning the Heart's player-of-the-year award.
Garcia's contract negotiations with the club stalled and the Sky Blues have pounced, signing Garcia for the 2013/14 season.
The former Hull attacker adds to an impressive array of attacking talent at Sydney, who have the likes of Alessandro Del Piero, Corey Gameiro and Nick Carle in their ranks.
"I'm thrilled to be joining Sydney FC," Garcia said on Friday.
"Sydney FC is a big club with big expectations and that's something I thrive on. To be playing alongside players like Alessandro Del Piero, Brett Emerton and Nick Carle will be a fantastic experience for me and something I'm very much looking forward to.
"I can't wait to start pre-season training with the team and I look forward to working hard with the rest of the boys to win a spot and then helping Sydney FC push for success this season."
The Perth-born 18-time Australia international spent several seasons at West Ham before stints at Colchester United and Hull.
Sydney coach Frank Farina believes Garcia, who played out wide for the Heart, will add quality and leadership to his side.
"Richie is a great addition to the Sydney FC squad for the 2013/14 season," Farina said.
"He is a proven performer at the highest levels of the game, has played English Premier League and been to a World Cup.
"He did well last year in the A-League and he fits in with what we are trying to implement and achieve at Sydney FC this season.
"Richie is a leader and a winner on and off the pitch and they are important ingredients when looking at who we bring to Sydney FC.
"He can play as a striker or a midfielder and I think he will suit our style of game just perfectly."
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