Leicester have agreed the signing of Wilfred Ndidi from Genk, subject to a work permit.
Ndidi has passed a medical and agreed a five-and-a-half-year contract, and Leicester expect the formalities to be completed later in the week.
Sky sources say the Premier League champions will pay up to £15m for the defensive midfielder, who is already a Nigeria international at the age of 20.
A statement on City's website claimed they "beat off considerable competition" to sign the player, who is an international team-mate of Ahmed Musa.
Ndidi spent two years in Belgium after joining Genk as a teenager and helped the club reach the knockout stages of this season's Europa League.
He will be eligible for the remainder of this season's Champions League assuming Leicester include him in a resubmitted squad by the February 1 deadline.