The 17-year-old attacking midfielder made his senior debut in the EFL Cup tie at Swansea last week signed his first professional contract at the CFA on Monday afternoon.
The highly-rated Spaniard joined City from Malaga in 2015, playing for the Blues’ Under-18s and Premier League 2 sides.
“I couldn't be happier signing my first professional contract with City ,” said Diaz.
“I only found out last week and it was amazing for me. This is one of the biggest clubs in the world and I’m really happy at City and my family is very happy in Manchester.
“It’s a dream for me and a big moment. I want to keep that dream going and hopefully I will get more opportunities to train with the first team.”
On his debut at Swansea, the Spain Under-17 international said: “I was calm because I was doing what I love the best, but it was amazing to get my chance, play with the players we have here and have Pep Guardiola as the coach.
“Pep has told me to keep working hard and my time will come which is obviously great for me to hear.”
Diaz admits he takes inspiration from the players around him and is always learning and listening to the advice the senior players give him.
Fellow Spaniard David Silva, with more than 100 caps for La Roja, is another player Brahim looks up to.
“David is a player I admire so much,” he said. “He is one of the best players in the world and he has everything. I can learn a lot from him and as a person, he is incredible.
“He has told me he can see me in the first team in the near future and that I have the quality needed. He told me I need to understand how things work, but that he likes my style and that if I work hard, my time will come.”
The oldest of five children, Brahim revealed he has four younger sisters who all look up to their big brother, saying: “Yes I have four sisters aged 1, 6, 10 and 14 so I have to set a good example!
“I really like Manchester and feel I could live here forever. I go back to Spain in the holidays which is fine but this is where I want to be and my family loves living here as well and they mean everything to me.
“Looking ahead, my immediate dream would be to play more for the first team and maybe even earn a place in the starting XI. That would be my dream scenario and I know there is a lot of hard work ahead for me – but I couldn’t be happier than I am and to sign an extension with City is incredible for me.”