Nolito found his first team opportunities limited last season under Guardiola, as the winger was only able to make 19 league appearances, scoring four and assisting two, as City scraped third over rivals Liverpool. He failed to start a Premier League game in 2017. The fee is reported to be £7.9m.
Nolito was spotted in Spain last month close to the club's stadium as he reportedly met with club officials to discuss personal terms.
Having been burnt previously by Sevilla on loans, Manchester City have been determined to get a permanent deal, even if that's at a reduced price.
Sevilla have been busy this summer as they prepare for the Champions League playoff round, with Luis Muriel, Ever Banega, Guido Pizarro and Sebastian Corchia already joining, while Vitolo, Adil Rami and Vicente Iborra have all departed.
He underwent a medical with Sevilla on Sunday and is now expected to join up with the squad on their pre-season trip to Japan.