The two clubs have reached a personal agreement with Donnarumma, who will leave PSG at the end of the season.
Initially, PSG wanted to sell Donnarumma for €50 million, but they are now willing to accept a price of €30-35 million.
This development brings Manchester City closer to signing Donnarumma, who will become their first-choice goalkeeper.
In exchange, City will sell Brazilian goalkeeper Ederson to Galatasaray, while James Trafford will serve as Donnarumma's backup.