Ouahim joins the A-League Men club on a two-year deal, making the overseas jump after five appearances for Moldovan Super Liga club Sheriff Tiraspol.
The attacking midfielder began his career with two-time Bundesliga champions Koln FC in 2017 and spent five years in the German league, before making the switch to Dutch second-tier club Heracles Almelo.
Ouahim, a Moroccan under-23 international, is bullish about helping his new club return to their championship days.
Sydney FC recruit Anas Ouahim says he wants to win trophies with the A-League club. (Supplied/AAP PHOTOS)
After falling short of a grand final appearance in the 2023-24 season, Sydney aim to claim back-to-back Australia Cup titles.
They first take on NPL heavyweights Oakleigh Cannons for their round-of-32 clash in late July.
"I'm not coming for a good time, I'm coming to win trophies," the 26-year-old Ouahim said.
"I will give everything to help the club achieve their goals and I want to be successful.
"I had a very good meeting with (coach Ufuk Talay), he knows my playing style and my strengths and how I can fit into the team and grow as a player and person."
Fellow German midfielder Arslan has quit City despite being signed for at least one more season and having attended pre-season training.
The 33-year-old asked for an early release - a request "reluctantly" agreed to by the club.
His departure deals a significant blow to City, who lost league record goal-scorer Jamie Maclaren in April.
Arriving in June 2023, Arslan took out the club's Player of the Year award and the Players' Player Award after scoring 19 goals and providing seven assists in 34 appearances across all competitions.
The Club has reluctantly agreed to the mutual termination of Tolgay Arslan's contract.— Melbourne City FC (@MelbourneCity) July 9, 2024
Also on Tuesday, goalkeeper Paul Izzo left Melbourne Victory.
Izzo is expected to join Danish club Randers off the back of two standout seasons in Melbourne, with Victory netting a small transfer fee for the 29-year-old shot-stopper.
He earned a Socceroos call-up off the back of his brilliant campaign last season, when he helped the club reach a grand final.
That included a memorable elimination final performance against Melbourne City, when he made multiple saves, then saved three spot-kicks in the penalty shootout and scored one himself.
It will be Izzo's second stint overseas after he played at Greek club Xanthi under Tony Popovic.
Izzo's departure would open the door for former Socceroos goalkeeper Mitch Langerak to return to Melbourne, where he started his career, in the January transfer window, after his contract with Nagoya Grampus expires.
Langerak has been linked to an ALM return, but it is not yet confirmed.
Across the Tasman, Wellington announced the re-signing of Marco Rojas for next season, while ex-Victory playmaker Jake Brimmer joined newcomers Auckland FC.
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