Manuel Pellegrini's side are reportedly close to announcing the capture of the Argentine defender.
The defender has been linked with a move from La Liga all summer and a move has reportedly now been agreed, with City set to pay £28.3million to secure his services.
The deal will also see defender Eliaquim Mangala, who only arrived at the Etihad last summer in a big-money move from Porto, move the other way on a season-long loan deal.
The Argentine’s move to the Premier League is said to have come about after the club finally buckled and allowed the player to leave, after he had repeatedly demanded a transfer and asked to be absent from training, report AS.
The move for Otamendi will be a welcome one for City fans, who saw their side suffer from a defensive standpoint last season, as Vincent Kompany and Mangala both struggled.
The French defender was especially disappointing considering the money paid to sign him, with him looking out of his depth in the Premier League on a number of occasions.
Aside from that, Otamendi would present a serious improvement on what they have in back-up to those two, with Martin Demichelis not a long-term option and Jason Denayer more of a player for the future. That said, Mangala and Kompany certainly looked better against Chelsea.