Elsewhere, Matildas great and Brisbane captain Tameka Yallop has joined Wellington in a huge recruiting coup for the grand finalists.
Vine, 28, starred for Sydney FC as an explosive and tricky winger, winning three premierships and two championships.
Vine catapulted to stardom when she scored the winning spot-kick in the Matildas' famous penalty shootout against France that secured a maiden Women's World Cup semi-final berth in 2023.
The winger joined North Carolina Courage in 2024 but made just 23 appearances in two years, scoring twice, while also taking time away from football to prioritise her mental health.
With golden boot winner Holly McNamara leaving City for Super League club Everton, Vine is instantly the club's biggest name.
"I'm really excited to be coming home and joining Melbourne City," Vine said in a statement.
"I've watched what City has achieved over the last few seasons and the standards this group continues to set, so the opportunity to come into that environment and be part of a team competing for trophies was really exciting to me.
"My time in the NWSL has helped me grow both as a player and a person, and I'm looking forward to bringing those experiences back to Australia."
Vine will have the opportunity to impress and push for three trophies across the ALW and the Women's Asian Champions League.
Attacking midfielder Yallop looms as the missing piece for Bev Priestman's Phoenix.
Yallop's wife Kirsty Yallop is a former New Zealand international and the move allows the couple and their two young daughters to be closer to family.
The 35-year-old, who missed this year's Asian Cup through injury, can also press her Women's World Cup case with the ambitious Phoenix.
"I'm chasing that trophy and so is Wellington, so we're aligned," Yallop said.
"Getting the opportunity to work under Bev was a massive drawcard, not to mention the facilities at NZCIS. They're second to none.
"It's a high performance environment in Wellington and that's something that I love being a part of.
"And the Phoenix have shown they're dedicated to their women's program. That was a major pull for me too."
Brisbane are retiring the former Julie Dolan Medallist's No.13 jersey - the first time they have done so for a men's or women's player.
Yallop, who has attended four World Cups and three Olympics and played overseas in several top leagues, spent the majority of her decorated A-League Women at the Roar, bar a one-season stint at City in 2018-19.
An inaugural Queensland Roar player aged 17 in 2008, Yallop won three premierships at Brisbane and scored in two grand-final wins.
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