The striker, who was declared missing on Friday, has earned a move to England after helping his country claim glory at the Under-17s World Cup earlier in November with six goals
Iheanacho was named the best player at November's Under-17s World Cup after scoring six goals, including one in the final, as his country triumphed in the United Arab Emirates.
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"As I am talking to you, I have chosen in my mind that Kelechi is going to Manchester United," he told Super Sport's 'Monday Night Football', before appearing to correct himself by saying: "I have told you that he is going to Manchester City."
Iheanacho senior later confirmed to MTNFootball.com that the player's family made a joint decision on where he would go in a meeting on Monday night. "We prayed [on Monday] and, after due consultations with family members, we came up with Manchester City, believing he has a future there," he explained. "That is where he will be uplifted."
The young striker had been declared missing by his father on Friday after he had left his home in Owerri without alerting his family but returned early on Monday morning before a decision on his future was made.
James has been integral in his son's fledgling career, with rumours that he had valued the starlet at €1 million (£840,000), though he denied those claims, declaring: "No, those people are my enemies. I never said that."