Malaga coach Manuel Pellegrini has signed a two-year deal with Manchester City.

Malaga Hoy says the Chilean coach has been told by current club Malaga they will waive the £3.4m release clause in his contract, freeing him to join City.

It is believed Pellegrini has already agreed terms with City following meetings with Etihad bosses.

But a deal may not be confirmed publicly until Malaga secure a place in next season's Europa League.