The Chilean coach has been lined up to replace Roberto Mancini by City's chief executive, Ferran Soriano, and sporting director, Txiki Begiristain, with his appointment due to be ratified early next month. Málaga have two league fixtures to play, at home to Deportivo La Coruña on Sunday and away at Barcelona, who have also been linked with Pellegrini, on 1 June. At a function to mark his successful tenure as Málaga coach the 59-year-old confirmed they will be his last with the club.
"Professionally, I am living my last hours in Málaga," said Pellegrini. "On Sunday I will manage my last game as Málaga coach at La Rosaleda. It will be a very emotional occasion and we hope to leave with the club qualified for Europe, with the mission completed and with the misfortune that the project changed. The agreement with the club has been gratifying and satisfactory. Everyone has the right to continue on their own path. I am not leaving because of financial ambition but because of a sporting project that will allow me to feel fulfilled."
Soriano explained why City decided to dispense with Mancini. "We want to play better football and we want to continue winning," he told CNN. "It is not that Mancini did anything wrong. We are just in another cycle, in another era.
"We are looking to play very good football, very beautiful football. When we are playing good football, then we will win.
"So it is not only about winning; it is developing football that is attractive and it will be played by our main teams, our first team in Manchester, our young teams in Manchester and also our teams in New York. We want to share the same football concepts across all our teams."
Pellegrini has been in charge at Málaga since November 2010, guiding the club to their highest league finish and Champions League qualification for the first time last season. Financial problems led to the departure of several key players last summer and a two-year suspension from European competition was imposed in December, although the second season was lifted on Wednesday after Málaga showed they had no outstanding debt.
Despite the turmoil Pellegrini led Málaga to the quarter-finals of the Champions League this season, missing out on a place in the semi-finals because of a controversial stoppage-time goal for Borussia Dortmund, and the team are currently sixth in La Liga. He took Villarreal to a Champions League semi-final in 2006, overseeing a remarkable success story during his five seasons with the small-town club, but lasted only one season with Real Madrid after finishing runners-up to Barcelona in 2009‑10.
Brian Kidd, one of Mancini's assistants, is in charge of City on their post-season trip to the US but six members of the former manager's substantial backroom team have followed him out since the FA Cup final defeat to Wigan, including David Platt and Attilio Lombardo.
City's midfielder Samir Nasri, who was openly criticised by Mancini last season, has welcomed the anticipated arrival of Pellegrini. "I think he is a great manager," Nasri said. "He proved himself at Villarreal and Real Madrid as well, even if he didn't win the title, but he finished with 96 points. And with Málaga as well. All his teams play attractive football. I think that is what people want to see. You pay [for your] ticket to go to football to see something great and he is the kind of manager who can do it so we will see what can happen in the summer."
Pellegrini could be followed to City by Málaga's attacking midfielder Isco, reportedly the subject of a £17m bid by City. Real Madrid held talks with Málaga and the 21-year-old player's family on Wednesday with a view to signing him but have not met the €35m (£30m) buy-out clause.
There has been previous interest from Monaco and City, and Pellegrini is known to be a big admirer of a player he has coached for the past two seasons.
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