Sane, 20, was pictured in the city on Monday morning.
His current club then confirmed that he was not travelling with the rest of the squad to their training camp in Mittersill, Austria.
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Sporting director Christian Heidel told Westdeutsche Allgemeine Zeitung newspaper: "We have agreed with Manchester. Now Manchester has to agree with the player. That should be done today or tomorrow morning the latest.”
Reports suggest that Sane stayed in Manchester overnight and is expected to be unveiled as the club's latest signing shortly, with the deal all but complete.
The winger went to Euro 2016 with Germany after scoring nine goals in 42 games for Schalke last season.
Last week, Guardiola said of the Schalke starlet:
You know, I know, everyone knows we would like to have him, but at the moment he's a player from Schalke. If he comes, we'll be happy. If he stays, I'll be happy.
How Man City could line up with Sane
The capture of the livewire forward will give City yet another option in attack. With John Stones also closing in on a £50m move to join City, Pep Guardiola is developing a formidable squad.
Here's the options City have, with our expected first-choice pick coming first:
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