City were last night celebrating the capture of Hughes after the club showed great determination to land their man by agreeing a staggering £4.6million compensation deal with Blackburn Rovers.
City owner Thaksin Shinawatra welcomed Hughes to City, subject to personal terms being agreed at a dinner with senior board members in London last night when a four-year deal was expected to be finalised.
"These are exciting times for Manchester City and I hope the supporters can understand that I share their goals.
"That sometimes means making ruthless decisions. Now we can go forward to a new era, with a new management structure and great hope and ambition."
The former Wales boss is expected to be paid in the region of £3m a year - £500,000 more than the out-going Sven Goran Eriksson.