Having won the Premier League title with Leicester against all odds in 2015/16 and being named PFA Players' Player of the Year, Mahrez tried to leave the club twice during the summer of 2017.
He then attempted to force a move to City in January of this year, only for the two clubs to fail to agree a deal due to their respective valuations of the player being so far apart at that time.
According to Sky Sports, the £60m transfer will now happen at some point 'this week' after the two clubs were able to agree on 'all major aspects of the deal'.
Mahrez will represent another club record transfer for City, breaking the previous mark set when French defender Aymeric Laporte joined from Athletic Bilbao for £57m in January.
Prior to Laporte's arrival, Kevin de Bruyne had been the most expensive player in City history following his £55m move from Wolfsburg in the summer of 2015.
Paris-born Mahrez joined Leicester from French club Le Havre partway through the Foxes' 2013/14 Championship winning season.
He then became a key player as the club miraculously escaped relegation with a late run of form the following year, before exploding into life by scoring 17 goals and providing 10 assists en-route to Premier League glory.
He famously ran riot as Leicester beat City 3-1 at the Etihad Stadium in February 2016 and again helped put his expected new club to the sword in a 4-2 demolition at the King Power Stadium in December later that year.