Here the 1837 typesetter added the preposition of between the city and Ammonihah, probably accidentally. As discussed under 1 Nephi 11:13 (which deals with the phrase “city (of ) Jerusalem”), the earliest textual sources determine whether the of should occur for any specific instance of “city (of) X”. The same dependence on the earliest sources holds for “land (of) Y” (see the discussion regarding “land (of ) Bountiful” under 1 Nephi 17:7).
As far as “city (of) Ammonihah” is concerned, we have examples of both types. There are 11 with the of in the earliest text and 3 without the of (here I mark each of the latter with an asterisk):
As can be seen, there has been some tendency to either remove or add the of before Ammonihah (besides here in Alma 8:18). Also note that there is no connection between whether the city is immediately preceded by of and whether of occurs after the city: we have one example of “of the city of Ammonihah” (Alma 8:9) and two of “of the city Ammonihah” (here in Alma 8:18 and in Alma 49:14). If we consider cases where there is no immediately preceding of before the city, there are ten with the of after the city and one without (in Alma 49:15).
Summary: In accord with the earliest textual evidence, the critical text will remove the intrusive of between the city and the name of the city Ammonihah in Alma 8:18 (thus restoring “on the south of the city Ammonihah”).