According to Sky Sports, the 27-year-old Algerian will undergo a medical this week with all other aspects of the contract between the two clubs already agreed upon.
'Watching them from afar has been a pleasure.
"Manchester City is a very big club with very big players and with the confidence gained from previous year, I think this season will be a very good season". They're redefining the English game and I wanted to be a part of it.
"I believe my own game can develop under Pep's management".
Pep Guardiola wanted Mahrez from Leicester City in January but was willing to wait until the summer after a refusal to match the Foxes' valuation. Have your say in the comment section below.
A club statement from Leicester said: "Riyad leaves with the best wishes of everybody who has worked with him at Leicester City Football Club".
"Riyad is a hugely talented player".
Mahrez was named PFA Player of the Year in 2015-16 when Leicester were crowned Premier League champions, with him scoring 42 goals in 158 appearances across all competitions during his time at the King Power Stadium. "He beats defenders and creates space", he said.
The Algerian worldwide scored 48 times (39 in league competition) in his 179 appearances with the Foxes.
Whilst Cristiano Ronaldo's switch to Juventus took most of Tuesday's headlines, the Premier League champions unveiled the Algerian worldwide late in the evening.
Nevertheless, with the player back on form, City will be hoping he can boost their chances of winning multiple trophies once again after they won the league and the Carabao Cup last season, giving them yet more quality and strength in depth in the final third.