Citizens' manager Pep Guardiola is an admirer of the Algerian, and was satisfied with his dedication to the Foxes during the second stanza of last campaign despite his failure to seal the move during the winter transfer season in the January.
Mahrez made 180 appearances in Leicester City colours, scoring 48 goals.
The 27-year-old winger joins the Premier League champions on a five-year deal after the two sides reached an agreement.
Manchester City have been in negotiations for the Algeria global all summer but are close to thrashing out the final details, with a deal likely to be signed off before the weekend.
The deal looked to have fallen through after Mahrez went on AWOL and missed out of Leicester training for a week and 3 days, but he later returned to continue playing for the Foxes. They're redefining the English game and I wanted to be a part of it.
"Watching them from afar has been a pleasure.
He beats defenders and creates space", City director of football Txiki Begiristain said.
"I think we can be successful over the coming years and I believe my own game can develop under Pep's management".
With his quality on the ball, ability to take on opposition players and his extensive passing range, the youngster would soon make himself hugely popular among the King Power Stadium faithful.
Mahrez joined Leicester from Le Havre for £400,000 in 2014, and was named the PFA Players' Player of the Year during their surprise Premier League triumph in 2015-16.
Riyad leaves with the best wishes of everybody who has worked with him at Leicester City Football Club.
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