The Stockport-born midfielder, who has been at City since the age of nine, joins City teammates Kyle Walker and Raheem Sterling in Gareth Southgate’s squad.
Foden ended the season as a regular in Pep Guardiola’s side, playing in 12 of our final 14 matches and registering eight goals and nine assists.
Southgate said: "The last eight months I’ve had so many difficult conversations, so to be able to call a player and let him know about his first England call up was a lovely moment and a reminder of what it means to them and their families.
"With Phil and Mason [Greenwood], we know them. They have been very impressive with our junior teams and both were excellent post-lockdown with their clubs.
"Both had a big impact. They have the potential to be England internationals for a long time - that’s now down to their mentality and belief. But we look forward to working with them.
"With young players, you’re aware if you’ve been working within football of these two for a long time, you only have to speak to people at their clubs. We know them from junior England teams, too.
“Phil we’ve watched for a long time. We felt at times last year it was better for him to play with the U21s. But we've known he’s a player likely to be part of the England senior team and now is a good time to do that.”
England face Iceland in Reykjavik on 5 September before playing Denmark in Copenhagen three days later.
Those games are their first in League A Group 2 of this year's competition, with England looking to improve on their third-place finish in the 2018-19 Nations League.
Everyone at City would like to take this opportunity to congratulate Phil on a well-deserved first call up.
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Full England squad:
Goalkeepers: Dean Henderson (Manchester United), Jordan Pickford (Everton), Nick Pope (Burnley)
Defenders: Trent Alexander-Arnold (Liverpool), Eric Dier (Tottenham), Joe Gomez (Liverpool), Michael Keane (Everton), Harry Maguire (Manchester United), Tyrone Mings (Aston Villa), Kieran Trippier (Atletico Madrid), Kyle Walker (CITY)
Midfielders: Phil Foden (CITY), Mason Mount (Chelsea), Kalvin Phillips (Leeds United), Declan Rice (West Ham), James Ward-Prowse (Southampton), Harry Winks (Tottenham)
Forwards: Tammy Abraham (Chelsea), Mason Greenwood (Manchester United), Danny Ings (Southampton), Harry Kane (Tottenham), Marcus Rashford (Manchester United), Jadon Sancho (Borussia Dortmund), Raheem Sterling (CITY)
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