According to Bild Man City are in the final stages of agreeing a fee with Dortmund for the Germany international and a deal is set to be announced before the end of May.
Arsenal have also been closely linked with Gundogan over the past year and were also in the race to sign him this summer according to the Express newspaper. However, the Gunners have turned their attentions towards the Borussia Mönchengladbach midfielder Granit Xhaka.
Gundogan will miss Euro 2016 after dislocating his knee during training earlier this month. The midfield playmaker has seven assists and three goals in 40 appearances for Dortmund this season.