The club will then be in position to introduce safe standing should any change in law occur.
The work will take place prior to the start of the 2021-22 season, meaning there will be no disruption for supporters, who by then are expected to be able to return to games.
Rail seats can be folded away and locked in position to create a safe standing area with barriers.
City believe introducing them now will enhance safety in an area already affected by persistent standing on matchdays.
The work will take place in the lower tier of the South Stand behind one of the goals.
Danny Wilson, managing director of Manchester City operations, said: “The development and installation of a bespoke rail seating system at the Etihad Stadium will not only improve supporter safety but also ensures that, until there is a change in legislation which permits safe standing, the matchday experience of supporters and seasoncard holders in the lower tier of the South Stand will remain unaffected.
“Whilst we will continue to remind supporters that they should remain seated during matches, we are also pleased to inform them that the installation of a rail seating area means the Etihad Stadium will be ready and prepared should the government bring forward legislation to introduce safe standing in the Premier League.”
Standing was banned at matches in the top flight in England following the Taylor Report into the Hillsborough disaster in 1989.
There are growing calls for standing to be allowed using the rail seat system but there has been no indication when this might happen.
Tottenham and Wolves have already installed sections of rail seating.
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