City have already seen two offers for the England international rejected by their Barclays Premier League rivals.
Toffees manager David Moyes appeared defiant that Lescott would remain at Goodison Park, despite the defender recently handing in a written transfer request.
However, Lescott was not included in Everton's squad for their previous two matches, increasing speculation that a move could be in the offing.
A statement on City's official website said: "Manchester City can confirm that agreement has been reached with Everton for the transfer of Joleon Lescott.
"The move is subject to the player agreeing personal terms and passing a medical."
Lescott moved to Everton from Wolverhampton Wanderers for a fee of £5m in 2006 and has since made 113 Premier League appearances for the club, scoring 14 goals.
The versatile stopper's solitary appearance this campaign came when Everton lost 6-1 to Arsenal on the opening day of the season.
City manager Mark Hughes has made no secret of his wish to further bolster his defensive ranks, having already brought in Kolo Toure from the Gunners.
Lescott now looks poised to join the likes of Toure, Roque Santa Cruz, Gareth Barry, Carlos Tevez and Emmanuel Adebayor in signing at Eastlands this summe
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