The Spaniard will also have a training pitch named after him with a mosaic alongside it at the club’s City Football Academy complex.
Silva, 34, saw his City career come to an end with Saturday’s Champions League quarter-final loss to Lyon in Lisbon.
Silva made 436 appearances for the club and won four Premier League titles, five League Cups and two FA Cups after signing from Valencia in 2010.
City chairman Khaldoon Al Mubarak said: “David Silva is a transformational player – a quiet leader who has acted quietly and deliberately and inspired everyone around him, from the youngest academy player to his senior team-mates over the past 10 years.
“He has put a stamp on the team, on this club, its history and even the Premier League as a whole.
“In doing so he has been instrumental to the beautiful football philosophy you see today. He was the start of it.”
Silva will join former City captain and team-mate Vincent Kompany in having a statue at the ground. The club announced last year Kompany would receive such an honour and it is planned for both statues to be unveiled in 2021.
David’s statue will act as a lasting reminder of the wonderful moments that he gave us.
The mosaic at the training pitch will celebrate Silva’s starring role in City’s stunning 6-1 defeat of Manchester United at Old Trafford in 2011.
Al Mubarak added: “As with Vincent before him, David’s statue will act as a lasting reminder of the wonderful moments that he gave us, not only as an incredible footballer, but as an inspiring ambassador who represented this football club with great dignity at all times.”
Silva’s contract at City was due to expire in June but he agreed a short-term extension to take him to the end of the interrupted 2019-20 campaign. He now becomes a free agent and has been linked with Italian side Lazio.
