Kagawa was Borussia Dortmund's second highest scorer last season, and after acclimatising himself to European football with two successful campaigns in Germany, the Japanese international is poised to pick up the English game very quickly.
The 18-year-old England Under 18 international is considered one of the nation's hottest prospects. United had been monitoring Powell for some time and had beaten off the likes of Arsenal, Everton, Chelsea and Manchester City for his services.
"We scouted Nick for months," said the United manager, Sir Alex Ferguson. "He is an exceptional talent and has been schooled well at Crewe. I'm delighted he has chosen to come to United. He has a lot to offer and we are all looking forward to working with him."