The City Football Group has announced that Hodgson has accepted a job as a consultant at the club and will begin working alongside interim head coach Michael Valkanis in the coming weeks.
The 69-year-old, who has been out of work since resigning from the England job after Euro 2016, has signed a short-term contract with the club and is expected to work alongside Valkanis for around a month.
Hodgson’s move to Australia appears to have come about through his close friendship with Brian Marwood, the CFG director who is responsible for working on football matters throughout the multi-club group.
“It’s fantastic, that’s why it’s so good being part of this [City Group],” Valkanis told the A-League after Hodgson watched the club’s training session on Thursday.
“It’s great when you get football people together, what should have been a 10-minute conversation turned into an hour with so many stories.
“He’s here as a consultant to help us coaches. We’re able to ask him whatever we require. He’s got lots of football stories and football knowledge.
“We’re so lucky to have him here, he’s got a wealth of experience.”
CFG acquired an 80% stake in the club in 2014, for £9.6m, promptly renaming the club from Melbourne Heat to Melbourne City.
As well as Melbourne and Manchester City, CFG also owns New York City FC and this week acquired Atletico Torque in Uruguay. It also has a stake in Japanese side Yokohama F Marinos.