Barnes, who departed the owner of The Independent and The Independent on Sunday in April last year, to be replaced by Ogilvy & Mather executive Daryl Fielding, is to take up his new role this week.
Jens Torpe, chief executive of City AM, said Barnes will be looking at changes to the newspaper's distribution as part of long-heralded plans to take the free daily business newspaper beyond London and into other UK cities.
Last month, City AM expanded its distribution in train stations around Surrey and Croydon, and is expected to boast a significant uplift of about 10,000 copies per issue from January's Audit Bureau of Circulations figure of 94, 626, in its March ABC.
City AM has previously shelved plans to launch in new cities, but Torpe insists this will now go ahead.
Barnes, who joined Independent News & Media UK in 2004, previously spent 20 years at Associated Newspapers.
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