Mahrez, who signed from Le Havre for just £400,000 in 2014, has made 179 appearances for Leicester, scoring 48 times.
Leicester have confirmed the deal is a club-record sale for one of the stars of their Premier League-winning campaign and subsequent journey to the Champions League quarter-finals.
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.
It's suggested the Algeria global is undergoing a medical with the Premier League champions.
Mahrez was given permission by the Foxes to miss their pre-season trip to France on Monday to conclude the deal.
"I am so pleased to have joined City, a side playing great football under Pep Guardiola".
With his quality on the ball, ability to take on opposition players and his extensive passing range, the youngster would soon make himself hugely popular among the King Power Stadium faithful.
City director of football Txiki Begiristain is confident Mahrez will prove a valuable addition as the champions look to mount a successful defence of their Premier League title and succeed in Europe. "Pep is committed to playing attacking football, which is a ideal for me, and City's performances last season were outstanding", he said on the club's official website.
Good signing for Leicester City?