The A-League Men and Women's competitions have traditionally played their championship deciders at the highest-placed teams' home grounds.
But the agreement struck with the New South Wales state government will ensure Australia's biggest city hosts the next three Grand Finals for both leagues.
"This is a unique opportunity to build a tradition for football fans," Australian Professional Leagues (APL) boss Danny Townsend said in a statement on Monday.
"When you think about a cup final in England, you think about the trip to Wembley, and we want fans in Australia to look forward to the A-Leagues finals in the same way."
The move brings football into line with Australia's other major sports, which also have one-off 'Grand Finals' to decide champions.
The Australian Football League, the professional Australian Rules competition, plays its Grand Final in Melbourne, where half of its 18 teams are based.
The National Rugby League Grand Final has long been staged in Sydney, where nine out of 16 teams are based.
Sydney is home to three sides in the 12-team A-League Men and two in the 11-team A-League Women.
The Red and Black Bloc, a supporter group for Western Sydney Wanderers, urged the APL to reverse the decision.
"This once again demonstrates the lack of fan consultation,” the group said.
"Earning the right to host the final was our tradition."
Australia forward Craig Goodwin (30), who plays for Adelaide United, appeared in a video promoting the Grand Final switch but withdrew his support on social media.
"I wanted to clear things up publicly. I may be in the video for the @aleaguemen choice to host Grand Finals in Sydney, but I do not support it," the winger tweeted on Monday.
"I am a player, but I am also a fan."
APL said the next A-League Women's final will be played in Sydney on April 30, with the men's to follow on June 3.