The 23-year-old was a stand-out player for the Monegasque side last season as they stormed to the Ligue 1 title and reached the semi-finals of the Champions League and the France international has been linked with a move to Pep Guardiola's side all summer.
The former Barca boss has been on the search for full-back reinforcements this summer after allowing Gael Clichy, Bakary Sagna and Pablo Zabaleta to leave on free transfers and with Aleksandar Kolarov believed to be closing in on a move to Roma.
City have already signed Kyle Walker from Tottenham for around £50m and are believed to be closing in on a deal for Real Madrid's Danilo after being left disappointed in their pursuit to sign Dani Alves, with the player electing to join PSG.
Pep Guardiola's side have now agreed a fee with Monaco for Mendy at the third time of asking after seeing two initial approaches rebuffed. The deal is worth more thank Walker's move, meaning that City will once again break the record for the world's most expensive defender.
The 'Citizens' have beaten off late interest from Chelsea to seal the deal, with the 'Blues' opting to switch targets after growing frustrated in their quest to sign Juventus' Alex Sandro.