The Frenchman was suspended without pay by City when he was on trial for rape and sexual assault.
He then took City to an employment tribunal to claim about £11 million in unpaid wages.
Judge Joanne Dunlop ruled that City were only entitled to withhold salary when he was in police custody, not when he was on trial.
In a statement on social media, Mendy said: "I am delighted with the decision and sincerely hope that the club will now do the honourable thing and pay the outstanding amounts, as well as the other amounts promised to me under the contract, without further delay, so I can finally put this difficult part of my life behind me."
Judge Dunlop said: "I found that Mr Mendy was 'ready and willing' to work during the non-custody periods, and was prevented from doing so by impediments (the FA suspension and bail conditions) which were unavoidable or involuntary on his part."