Sterling was omitted from their pre-season tour of the US as a result and is expected to complete a switch to the Etihad in the coming days.
The England international has made his desire to leave no secret after turning down an improved contract of £100,000 a week in March.
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Raheem Sterling's relationship with Liverpool boss Brendan Rodgers has broken down
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He called in sick to training twice last week and it appears Reds boss Brendan Rodgers has finally conceded defeat in his attempts to keep him on merseyside.
The 20-year-old is expected to be joined by a host of new faces in the blue half of Manchester, with the club weighing up an offer for Juventus star Paul Pogba and Wolfsburg's former Chelsea flop Kevin De Bruyne.