Benfica released a statement on Thursday morning say that they had reached an agreement with the Premier League club to sell the goalkeeper for €40m (£34.9m).
The club have reportedly informed the Portuguese stock exchange of the deal but reports claim the transfer cannot be completed until a third-party element is resolved.
The 23-year-old Brazilian joins Pep Guardiola’s side after two seasons in the Primeira Liga.
The signing, if ratified, will be British record fee for a goalkeeper.
Ederson becomes City’s second summer signing, after the capture of the Monaco midfielder Bernardo Silva for £43.6m
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