Goal understands the Chilean already has a verbal agreement with the club, but he has publicly stated that he will now talk to City about signing a contract to replace Roberto Mancini.
The 59-year-old's tenure as Malaga boss ended in a 4-1 loss to Barcelona on Saturday, and after the game he confirmed he has agreed to speak to the Premier League runners-up.
"When I reach an agreement I will tell you. I have an agreement to start conversations with Manchester City," he told reporters.
"Some rumours will be right, others won't, but I have kept my focus on Malaga until now.
"Now the league is over we will start from Monday to look forward and to see where my future lies."
After an emotional farewell, the former Real Madrid and Villarreal manager admitted it will be hard to say goodbye to Spanish football.
"It is going to be hard for me to leave Spain after nine years," he continued.
"It's a country that has treated me marvellously well. An important era of my life ends, and my future will surely take me to another country."