The Daily Mail reports that talks are ongoing and terms have not yet been finalised but it seems that Leicester will finally have to let their talisman leave after withstanding bids in each of the last two transfer windows.
Mahrez went on strike for a week after the Foxes fended off interest from City in January before returning to the fold and finishing the season on a high.
The Algerian's contract runs until 2020 but he is unlikely to sign another one and Leicester know that his value will continue to dwindle with every passing year. Given his attitude problems, they may feel that now is a sensible time to part ways.
Mahrez would add further firepower to City's existing embarrassment of attacking riches. The 106 goals they scored this season was a Premier League record but Pep Guardiola is not content to rest on his laurels as he looks to build a dominant dynasty at the Etihad Stadium.
City's main two summer targets are Mahrez and Napoli's Jorginho. With neither player involved in the World Cup this summer, Guardiola will hope to get both deals sewn up quite early.
Jorginho may require more time though as City's initial bid of £40m was turned down, with Napoli holding out for £60m instead.
Leicester and Manchester City are also in talks over City youngster Patrick Roberts, who has spent the last three seasons on loan at Celtic.