Milner has been the subject of a lengthy pursuit by City but the drawn-out transfer is nearing completion and the player has undergone a medical as well as being spotted at Eastlands.
Ireland, who is moving to Villa Park as a makeweight in the deal, has also passed his medical and only the finer details of the deal need to be finalised.
MacDonald, who is currently in charge of Villa following Martin O'Neill's departure, expects the deal to be confirmed imminently.
"Hopefully by the end of today [Wednesday] he will have signed," MacDonald told Sky Sports News. "At least one way or another we will know if we have James or Stephen, and Stephen is going to be coming here."
It is reported that Manchester City will pay £18 million as well as sending academy graduate Ireland to Villa Park in order to recruit Milner.