That's according to Spanish journalist Gerard Romero.
The Arsenal superstar has been linked with a move away from the Emirates this season with the Chile international yet to pen a new deal.
Sanchez, 28, had a fine season under Arsene Wenger, netting 30 goals in all competitions.
However, the winger is out of contract next summer and could leave the Gunners for free.
Sanchez is demanding a pay rise to stay in north London under Wenger, who penned a new two-year deal last month.
And according to Romero, Sanchez has agreed to join City, with the two clubs yet to decide on a transfer fee for the former Barcelona star.
He tweeted: "Alexis Sanchez has closed the deal with City. Manchester [City] and Arsenal have to close the transfer of the Chilean, not easy."
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