The 21-year-old, who scored 16 goals in 32 games for the Northern Premier League side last season, has signed a two-year deal after a successful trial and could make his competitive debut for the Minstermen in Saturday’s season opener against Wycombe.
Helping seal the move was a spectacular goal for City during last week’s 2-1 friendly victory over Newcastle United.
Worksop-born Thompson came through Retford’s youth system, then spending three seasons at Lincoln City, and Rich Williams, who coached him at Retford United, said: “I honestly don’t think York will be his final stop. He just needed someone to give him a second chance and he has that now.
“Those of us who worked with him are delighted to see him succeed and we are proud of him for how hard he’s worked and for never giving up. I can’t wait to see the rest of his story unfold - just look at Jamie Vardy.
“Reece re-joined us at Retford after his release from Lincoln City. He had been on trial with Worksop Town, but Simon Clark told him he wasn’t ready for the first team and needed to play with the U19s team.
“Reece contacted me about coming back to Retford as he’d played in the U19s prior to going to Lincoln and had friends in the team.”
But there were problems to iron out with Thompson’s temperament.
“Having spoken to people within the game, the reports were he had bags of raw talent but he was difficult to work with and had attitude problems,” said Williams.
“When I began working with him it was obvious that he had talent. No one could cope with his explosive pace and if he got anywhere near goal you knew the ball would end up in the net.
“He was low on confidence and had a short temper, but to be fair he knew that and he wanted to work past it.
“We spent half a season working on how to control his temper and round his game off to make it possible for him to play first team football.
“He listened, he took everything on board and he smashed the U19 league goal-scoring record in the process with 32 goals in 18 games. In 20 games with the first team from Christmas onwards he score 14 times. The following season he scored 39 in a full season before moving on to Frickley.”
He added: “Reece has the potential to go a long way in the game. He’s one of the most driven lads I’ve ever worked with.
“All he wants to do is play football. He has a great family behind him as well. They keep him grounded and honest, but he’s got bags of passion and a will to succeed.
“His movement is intelligent and his pace is electric. He’s as quick running with the ball as most are without it. He’s also ruthless, he doesn’t let anything stand in his way.
“He’s a very humble lad as well. He’s contacted everyone individually to thank them for helping him to get to this point which to me sums up his character - just a really nice normal lad.”