Bayern Munich have agreed a fee of £54.8m with Manchester City for Leroy Sane, with the German set to sign a five-year deal at the club.
The Bundesliga champions will pay an initial fee of £44.7m (€49m) with a series of performance and trophy-related add-ons.
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These could lead to an additional £10m (€11m) for trophies won such as Bundesliga and Champions League titles as well as personal awards for the player himself.
City will also take 10 per cent of any profit made by the German club should they sell Sane in the future.
The 24-year-old has continually been linked with a move back to his homeland which has seen City give up almost any hope of negotiating a new contract after nearly two years of talks with the Germany international.
It is also believed the winger will double the wages he was being offered by City to stay at the club with Bayern set to pay the player around £20m per year.
Sane has only just returned from a cruciate ligament knee injury sustained in the Community Shield win over Liverpool back in August and was set to enter the final year of his contract at the club.
Therefore the deal can be seen as good business for the club who signed the player from Schalke for £37m in 2016.
Comment: Manchester City losing a special talent
Sky Sports' Adam Bate
Attempts to explain Manchester City's failure to retain their Premier League title usually include some reference to the players that they have missed this season but most would begin with the departure of Vincent Kompany or the injury problems of Aymeric Laporte.
The absence of Leroy Sane, who has played only 11 minutes of City's title defence, is too often overlooked given his significant impact in back-to-back title-winning seasons.
Sane not only reached double figures for goals in both campaigns but he also provided 25 assists in that time - more than any other player in the Premier League over both seasons.
The German winger was a wonderful outlet on the flank and the hope was that these displays were just the start. After all, this is a player who only turned 24 in January.
But a move to Bayern Munich had long been mooted and the worst kept secret is now out. City supporters will not be surprised. And yet, his exit still comes tinged with frustration. Guardiola is losing a formidable talent whose best years could yet be ahead of him.