Pep Guardiola's side are close to securing a £42 million transfer for the Leeds United man, as per The Athletic, with a potential £3 million in performance-related add-ons.
Teenage midfielder Darko Gyabi is expected to move the other way in a separate £5 million deal.
Leeds supporters have been reacting to the news on social media, issuing a variety of responses as the reality of Phillips' impending exit hits home.
Many have been resigned to losing the England international this summer, despite Leeds securing Premier League football for another season.
Phillips' career trajectory has sky-rocketed since making his Premier League debut, becoming a mainstay of Gareth Southgate's Three Lions setup, boasting a specific set of skills Leeds have found difficult to replicate in his absence.
One supporter Kris Hilliam tried to view the transfer through a more positive lens on Twitter: "In the end the fee for KP [Kalvin Phillips] makes little difference if we come out of this window with a stronger squad and judging by the types of players we seem to be looking at it's likely to be the case. We can replace him with someone who fits at least as well (if not better) for less."
Leeds are still in the market for a more senior defensive midfielder in light of Phillips' departure.
Gyabi is not understood to be a direct replacement for the City-bound midfielder.
Leeds United Mad took a more sentimental view of Phillips' time at Elland Road: "If Bielsa had never arrived (I know) then Kalvin would have probably left for about £500k to Middlesbrough and nobody would have batted an eye-lid. Thank you KP - thank you Marcelo."
"No qualms with Kalvin by the way, gave it his all for us and stayed loyal to bring us up. That was key to putting us in the position where we are now. The very best of luck to him," said Shaun Cronin on Twitter.
Leeds supporter @Philbielsa took a different view, comparing Phillips' fee to his England teammate Declan Rice: "If West Ham quote £150 million for Declan Rice, it would appear Phillips has been sold on the cheap."
Many deem the £42 million transfer fee on the cheap side given Phillips' influence on and off the pitch at Elland Road, however the likes of Yves Bissouma was sold for £26 million this summer, as pointed out by Twitter user @anyoldsport: "Bissouma went for £25m and he’s a better player than KP."
When Phillips' move becomes official, there will be an outpouring of emotion and gratitude from a fanbase who have witnessed one of their own become one of Europe's most sought-after players in his position.
Phillips' time at Elland Road has been memorable; his involvement punctuating one of the club's most successful periods in recent history at a time when club and supporter were so intimately inter-connected.