No deal has been agreed as yet, but we understand Leicester will receive around £60m - some way short of their £80m January asking price.
Despite the player having formerly handed in an official transfer request back in January, the Foxes declined to sell him.
And Mahrez did not take the rejection well refusing to play or train for some time and even scooped up fines fined for his boycott.
Leicester have granted Mahrez a week off after a friendly worldwide with Algeria, but it is believed that the Foxes granted the extra rest for Mahrez to finalise his deal with City.
Manchester City have signed Leicester City attacker Riyad Mahrez
Manchester City have completed the signing of Riyad Mahrez from Leicester for £60 million (€68m/$80m). Manchester City signing Riyad Mahrez . "He beats defenders and creates space", he said.
The rumours are not going away about Real Madrid forward Cristiano Ronaldo signing for Juventus with the 33-year-old Portugal captain ready to accept a £26.5m-a-year contract.
He has been given extra time off by the Foxes after playing in Algeria's global games in June and is due back for training next week.
Signing James Maddison, 21, from Norwich City triggered Leicester's willingness to enter into talks with City with the likely fee for Mahrez funding their summer spending.
The Algerian worldwide returned to top form last season, scoring 13 goals and providing 13 assists in 41 appearances.