Umberto Gandini tweeted: "Tranfer agreement for Balotelli signed with Manchester City. Medicals tomorrow in Milan, then personal terms until 2017 signing."
The Serie A giants are understood to have agreed to pay around £20 million (Dh11.57m) for the player, with some of the fee being made up by bonuses.
City have so far made no comment on the matter.
As contracts are yet to be signed, a degree of caution is understandable.
However, providing there are no unforeseen hitches, Balotelli will join Milan ahead of Thursday's transfer deadline, thus ending a remarkable two-and-a-half-year stay with City, during which time the forward has attracted almost as many headlines for off-field incidents as success on it.
A member of City's starting line-up in the 2011 FA Cup final, when they ended a 35-year wait for a trophy, Balotelli also provided the crucial injury-time pass that set up Sergio Aguero for the dramatic Premier League title-winning goal at the Etihad Stadium in May.
But that momentous afternoon came just five weeks after Roberto Mancini, the manager, had said Balotelli would never play for City again after the striker was sent off at Arsenal, having been lucky to avoid a red card earlier in the same game for a dreadful challenge on Alex Song.
Such lapses in professionalism have scarred Balotelli's time with the Blues.
There have been numerous training ground bust-ups - only recently he had to be separated from his manager after he lunged in on Scott Sinclair - while his petulant on-pitch behaviour led to City imposing a fine which he threatened to challenge at a Premier League tribunal until finally backing down in December.
Through most of the controversy, Mancini has stood by a player he has paid special attention to since they were together at Inter Milan.
And, until this season, Balotelli's contribution on the pitch had been enough to keep Mancini and the City supporters on his side.
However, after returning from Euro 2012 with his reputation enhanced by a series of impressive performances for Italy, most notably the semi-final win against Germany when he scored twice, he has made little impact on City's title defence.
He has made just two substitute appearances since a dire performance against Manchester United at the beginning of December, when he was handed a surprise start, but did little of note before being substituted in the second-half.
Although Mancini and his assistant David Platt have repeatedly stressed since then that Balotelli is going nowhere, rumours of a move to Italy have gained strength.
And now all that is required are the final touches to be put to the transfer of a player many will ultimately feel has been more trouble than he is worth.