The youngster has committed her immediate future to Nick Cushing's side by putting pen to paper on a deal which runs to the end of the 2017 campaign.
A City fan born in Rochdale, Walsh made her debut for the Blues as a substitute in July 2014 in a hard-fought 1-0 win over Notts County Ladies.
Since then, she has blossomed and is delighted to be continuing her fledgling career with her childhood club.
"It's a dream come true," she declared. "I feel really happy. It's a privilege to be signing a contract at a club with such ambitious projects for the women's team.
"I never thought I'd be playing for City - I've supported them since I was young. It's absolutely amazing to be playing for them.
"It was definitely an easy decision and I'm going to carry on working hard."
The midfielder, whose interest in football sparked at the age of six, played an important role in City's 2014 Continental Cup-winning side and became a first-team regular towards the end of the season. She has also gained international experience with England at youth level.
Although she is known as one of the country's rising stars, the youngster - just 18 and finishing her A-levels - is proud to be part of a team who she feels are doing so much for the women's game, and hopes to inspire the next generation.
"The facilities I've played in before are nothing compared to this," she admitted. "When I was younger, the women's game was nowhere near as developed as it is now. That's why I'm so happy to be at this club.
"Although I've never really thought of myself as a role model, I want to show younger girls that it is possible to join a team like City - even at a young age."
Developing at a rapid pace, Walsh is also keen to learn from those around her. It's clear playing with and against some of the world's best players in the FA Women's Super League has done wonders for her progress - but the midfielder is remaining grounded.
"You just have to work hard and try your best," she stated. "That's all you can do.
"When you're around those players, you're bound to progress. I've learnt a lot from them technically and tactically - and they help you through the game.
"Before the cup final, Steph Houghton took me to one side and told me try my best. The older players speak to you before, during and after and it helps a lot.
"In terms of targets for this season, I want to get back fit and in the starting 11 as soon as I can. As a team, we want to get some points on the board in the league because we could be challenging for the top two."
Manager Cushing has high hopes for the youngster, telling mcfc.co.uk: "Keira is a fantastic young talent with huge potential. She has shown an excellent attitude since she came to the club last season and understands the importance of hard work to develop her game.
"We are delighted to offer Keira her first contract and hope she continues to work hard to improve and develop her game for her."
Academy Director Mark Allen echoed Cushing's sentiments, adding: "Keira has worked exceptionally hard to come up from the Development Squad. She was a real shining star in that group and we wanted to blood her into the first-team environment as soon as practicable.
"She's adapted to that extremely well and got herself a starting position in the senior team which is no mean feat. She's an outstanding prospect and it's our job to develop it to the highest possible level.
"If she carries on with the same attitude, I can see her having a very successful career in football."