The Foxes revealed the Nigeria international had agreed to join the former English champions having endured a tough time at Etihad Stadium.
Club’s vice chairman, Aiyawatt Srivaddha-naprabha claimed that Iheanacho looks set to join his compatriots Ahmed Musa and Wilfred Ndidi having clarified dispute concerning the player’s image right.
“A fee has been agreed, only the medical to go, and it could be as early as Friday,’’ he told BBC Leicester Radio.
The Super Eagles forward scored four goals in 20 appearances last season, after falling out of favour with Pep Guardiola.
If he comes through his medical, Iheanacho is expected to pen a four-year deal with the King Power Stadium side.
Also, he will become Leicester’s fifth signing of the summer following the arrival of Harry Maguire, Sam Hughes, Vicente Iborra and Eldin Jakupovic.
Craig Shakespeare’s men have returned from their Premier League Asia Trophy campaign in Hong Kong, and are set for a thread of further pre-season friendlies.