He will be the fourth goalkeeper at City manager Pep Guardiola’s disposal, with Ederson, Stefan Ortega and Marcus Bettinelli already at the club.
It is anticipated Trafford will challenge Brazil international Ederson, who has been first-choice goalkeeper for eight years, for the number one spot.
Ederson is in the final year of his contract and has been linked with a move to Galatasaray, yet just last month he called rumours of a departure “99% fake news”.
City have not received any bids for the 31-year-old yet, while there are doubts about the future of German Ortega as such competition for a place can not guarantee him game time.
Trafford signed for City’s academy in 2015 but never made a first-team appearance and spent time on loan at Accrington Stanley and Bolton Wanderers.
He has appeared for Burnley 73 times, including 28 in the Premier League in the 2023-24 season.
Trafford has represented England from U17s to U21 level and was part of the winning European U21 Championship squad of 2023, in which he kept six clean sheets and did not concede a goal.
He received his first senior call-up for international duty in 2024 but has yet to make his debut for the senior team.
If he returns to the Etihad he will be City’s sixth signing of the window after midfielders Tijjani Reijnders (initial fee of £46.5m), Rayan Cherki (initial fee of £30.45m) and Sverre Nypan (£12.5m); left-back Rayan Ait-Nouri (£31m) and Bettinelli (nominal fee).
They also spent £200m in the January transfer window to boost their squad following significant injuries across the pitch.