The 28-year-old, who can also play in defence, has previously been on the books of A-League sides Central Coast Mariners and Western Sydney Wanderers.
City owner John Comitis is confident Sim will add value to the newly-formed outfit.
"The club was looking for a versatile and experienced player that would be able to play numerous positions and bring a high level of professionalism," Comitis said.
"That is why we have gone beyond the borders of Africa to bring Matt Sim who has a great deal of experience in the Australian league and definitely fits the bill."
City were recently launched after former Ajax Cape Town boss Comitis bought the PSL status of Mpumalanga Black Aces.
Ex-Orlando Pirates coach Eric Tinkler will guide the team in the Absa Premiership in 2016/17.