Sterling is set to sign significantly improved terms at the Etihad, making him one of the club’s best-paid players, after months of negotiations.
The 23-year-old’s current contract is due to expire in the summer of 2020 and allowing the terms to run into their final year would have risked losing Sterling at a knockdown price.
Sterling is, however, now expected to secure a new five-year deal, extending his stay in Manchester until 2023.
Pep Guardiola has made no secret of his desire to tie Sterling down to a long-term contract, having watched the England international become an integral member of his squad last year.
“It’s well-known that we are delighted with him, we would like him to continue,” Guardiola said, when asked about Sterling's contract situation in September.
“What’s important is that Raheem and his people know how delighted we are with him.”
Sterling will follow the likes of Kevin De Bruyne, Fernandinho, Sergio Aguero, Gabriel Jesus and Ederson in signing a new contract at the Etihad this year.
The England international played a major part in City’s record-breaking Premier League title win last season, scoring 23 goals in all competitions.
Sterling has made a total of 152 appearances for City since joining from Liverpool in a high-profile £49million move in 2015.
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