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The county council withdrew from the bid shortly before it was submitted, arguing the City Ground had not been fully considered and the new stadium scheme included 4, 000 homes on greenbelt land.
BBC: Nottingham stadium plan hit by World Cup blow
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Norster will hope the move echoes the success of rivals the Ospreys who ground-share with Swansea City at the Liberty Stadium.
BBC: Cardiff teams agree ground share
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Milner, who scored in Villa's 3-0 opening day Premier League victory against West Ham United, passed a medical on Tuesday before completing the move on Wednesday after paying visits to the City of Manchester Stadium and the club's Carrington training ground.
BBC: James Milner completes his transfer to Manchester City
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He said the stadium was "really important to the city" but the firm was embarrassed about the old ground being empty.
BBC: Victoria Ground