The 32-year-old Argentinian, who is City's third longest-serving player after Joe Hart and Vincent Kompany, joined City from Espanyol in 2008 and is out of contract in July.
Fan favourite Zabaleta has made more than 300 appearances for the club, winning two Premier League titles, two League Cups and an FA Cup.
A statement released by City said: "Pablo has informed the club he will move to pastures new, but leave behind many happy memories.
"Fans will have the opportunity to show their appreciation for one of the club's most loyal and loved servants of recent times against West Brom on Tuesday evening, which will be Pablo's last home appearance."
Zabaleta has started 22 games in all competitions this season for Pep Guardiola's side. Early reports are linking him with a move to West Ham.
Yaya Toure, Jesus Navas, Gael Clichy, Bacary Sagna and Willy Caballero are among the other City players who are out of contract this summer.
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