Stuart Pearce must move quickly if he is to replace Middlesbrough-bound Sylvain Distin and avert a defensive crisis ahead of Sunday's Premiership opener at Chelsea.
Middlesbrough were discussing personal terms on Tuesday night with Distin after having an offer for the Frenchman accepted.
Distin rejected the offer of a new deal at Eastlands, and his existing deal has less than 12 months still to run. City have not yet revealed details of the fee for Distin.
Middlesbrough have earmarked the 28-year-old as a replacement in the centre of defence for Gareth Southgate, who retired as a player after being appointed manager earlier this summer.
Should Distin move, City may find themselves in a defensive crisis going into their first match of the season.
Distin's former central defensive partner Richard Dunne is in danger of missing Sunday's opening Premiership clash at Chelsea, leaving Pearce short at the back. However, City have been linked with a move for German defender Robert Huth - whose move to Boro earlier this summer fell through.
The Eastlands club have expressed reluctance to lose Distin, even though he would be allowed to leave on a Bosman free transfer next summer under the current circumstances.
Manager Stuart Pearce even stated he would be happy to see Distin enter the final year of his contract without reaching agreement on a new deal.
Speaking last week, Pearce said: 'Until people meet our valuation of Sylvain, he will stay where he is, which will only benefit me because he is a good player.
'It would be no skin off my nose if he enters the final year of his contract. I am a football manager, a year is a hell of a long time in football management.'
Distin spent four seasons with City, who he joined from Paris St Germain in May 2002, after a spell on loan at Newcastle.
Newcastle had also been linked with a bid for the uncapped centre-back this summer, however Boro have made an offer City deem acceptable.
As well as declaring himself retired - barring an injury crisis - Southgate has also let defender Franck Queudrue leave the Riverside Stadium this summer, with Fulham his destination.
The club have, however, signed a ready-made replacement for Queudrue in Julio Arca from Sunderland.