By Paul Clennam and Sam Lee
City have been trying to sign De Bruyne all summer but have been met with fierce resistance from his club, who are holding out for a huge fee for the 2014-15 Bundesliga player of the season.
Indeed, after signing Raheem Sterling for a potential £49m in July the Premier League leaders would be required to break their transfer record for a second time this year.
Having been reluctant to go over £50m initially, City could now surpass that figure with the inclusion of several performance-related add-ons, as with the Sterling transfer, and they are hopeful they can conclude negotiations in the coming hours.
De Bruyne appeared to rule out the possibility of a move away from the Volkswagen Arena on Monday evening when he was quoted as saying "I will stay at Wolfsburg."
But it quickly emerged that he had been asked to repeat the words in German by the host of a Sport Bild awards ceremony, where he received his 'star of the year' prize, and his agent moved quickly, and angrily, to stress that the Belgian's future remains up in the air.
"I am furious by what has happened tonight," he said. "No decision has been made on Kevin's future in this transfer window. We have yet to find out if Wolfsburg has reached any agreement with a club."
The faux pas has caused embarrassment for both De Bruyne and Wolfsburg and Goal understands it has helped to expedite the process; depending on Wednesday's planned talks City believe they could be flying back to England with the playmaker in tow.
City are also ready to announce the signing of Valencia centre-back Nicolas Otamendi for £31.7m after wrapping up talks on Tuesday, with the defender having arrived in Manchester to complete the second part of a medical.
Otamendi had been linked with Manchester United and Real Madrid earlier this summer but City emerged as the front-runners for his signature in recent weeks and have concluded a straight cash transfer since Sunday's 3-0 victory against Chelsea.
A loan move for Eliaquim Mangala had been part of negotiations over the weekend but his employers insisted he would not be going anywhere, and after Jason Denayer and Marcos Lopes were put on the table both clubs agreed upon a cash only deal, which at €45m falls €5m short of Valencia's publicly-stated asking price.
With the Spanish club preparing for their Champions League qualifier against Monaco on Wednesday evening, official confirmation of the deal could be put back until Thursday.