The paper will herald its arrival with a poster advertising campaign supported by through-the-line activity.
Grounds Morris Smith was appointed without a formal pitch and follows almost a year of development work on the project by the agency.
The colour tabloid, originally to be called London Business Daily, is the brainchild of Lawson Muncaster, the former vice-president of global sales at Metro International and one-time sales director at Eurosport and CNN. City AM will be edited by David Parsley, a former business editor of the Sunday Express.
Muncaster said: "Newspapers need partners who have experience, integrity and the ability to move fast in all areas of strategic and creative development. Grounds Morris Smith offered us that."
City AM will have an initial distribution of 60,000 copies, rising to 100,000 within the first three months.
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