Manuel Pellegrini confirms his exit from Malaga to open door to Manchester City job

Chilean will leave club and is hotly tipped to replace Roberto Mancini at Manchester City, who have named Claudio Reyna as their director of football at New York City FC

Manuel Pellegrini has confirmed he will be leaving Malaga at the end of the season, clearing the way for him to join Manchester City.

The 59-year-old emerged as the front-runner to replace Roberto Mancini at the Etihad before the Italian had even left his post, and today's news will only increase speculation that the former Real Madrid boss is moving to the Premier League.

Malaga have yet to confirm their manager's exit officially but, in a speech to the Malaga Provincial Council, Pellegrini confirmed he was leaving La Rosaleda.

"My coaching staff and I have separated from Malaga but our union with this city will be eternal," he said. "We had a time with the club that was very rewarding. Everyone has the right to move on.

"Sunday will be my last match at La Rosaleda and will be very exciting for me. I'm not leaving due to the matter of money but looking for a project that allows me to develop my profession conveniently."

The most convenient project could well be at City, who have been on the lookout for a new boss since Mancini's departure earlier this month.

Pellegrini's name was being linked with the Blues before the Italian's exit on May 13, although the Chilean denied a deal had already been done following the goalless draw with Sevilla the day before.

"I deny here and now being the new coach of Manchester City, I haven't signed any agreement with anybody," Pellegrini said on his club's official website at the time.

"I've been fortunate enough, and very proud, that every year the big clubs have shown an interest in me. I have an agreement with Malaga not to talk to anyone and nothing has been agreed with any other club.

"I hope in the coming weeks that things will become a little clearer about what is going to be the future here at this club."

That clarity has now been provided and comes on the day that UEFA confirmed Malaga had had the second year of their European ban for unpaid bills lifted.

The Qatari-owned club had been handed a two-year ban from European competition, with one year suspended, and fined 300,000 euros (£256,954) but the suspended year has now been chalked off.

The first year will still stand, however, meaning the club will not compete in Europe next season should they qualify and that appears to have had a bearing on Pellegrini's decision.

Malaga are currently sixth in La Liga and seem certain to finish in the Europa League places as they sit five points clear of eighth-placed Rayo Vallecano with two games left to play.

"I'm going for sporting reasons," Pellegrini continued. "We leave the club qualified for Europe with the mission accomplished but it is unfortunate that this project changed."

Meanwhile, Manchester City today announced that their former American midfielder Claudio Reyna is to be the first director of football at the New York City football club they are establishing in an attempt to crack the lucrative market in America and earn big money to  compete in Europe.

Reyna, 39, who played 116 times for City between 2002 and 2007 is inexperienced in football management but his appointment reveals how City are attempting to use the New York franchise to position themselves America's adoptive Premier League team.

Reyna, who played 111 times of the United States national side which he also captained, said: “This is very exciting for me, having had the opportunity to play both for my country and Manchester City I could not imagine a more tailor made opportunity. In Manchester I experienced what the club is about - that it is related to the community. It will be the same here.

"I grew up in New Jersey where we didn’t even have a proper league. It was the tail end of the North American Soccer League and I have vague memories of the Cosmos. I didn't even dream of playing professional soccer. Kids will now grow up dreaming of playing for New York City FC and playing for Manchester City. New York City deserves a team, needs a team."

At the official launch of the New York team, City chief executive Ferran Soriano said that the club would make it their priority to make 'NYCFC' - as the club is already being called - "one of the best soccer clubs in the world."

New York mayor Michael Bloomberg said: “New York is home to the world’s greatest sports fans. Sorry Manchester but that’s a fact. There are over two million New Yorkers who play soccer. This is just one example of what this city is doing and what we will continue to do.”

Randy Levine, president of the New York Yankees who have a 25 per cent share in the new club, said: "We are not the type who pass through jut to get a few headlines."

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