The 32-year-old becomes the fifth foreign recruit for Jorge Costas team.
An experienced campaigner in some of Europes most elite competitions, Machado joins Mumbai City off the back of a successful campaign with Portuguese side CD Aves, winning the Taa de Portugal.
Machado made his first move outside Portugal when he signed on loan for French side AS Saint-tienne. After impressing in the French Ligue 1, he joined Toulouse ahead of the 2009-10 season and went on to play for Les Violets for three seasons.
Paulo has been a household name in top level Portuguese and European football for many years now. He brings with him so many years of experience and a strong winning mentality, Costa said.
Paulo was only breaking in during my time at Porto but it was all there to be seen, even 14 years ago. I am excited to work with him once again and Im confident he can be an important figure in this side, he added.Read More