The 19-year-old defender has established himself in Pep Guardiola's starting plans throughout this season.
The Spanish Under-21 ace has impressed, and was attracting interest from his old Catalonian club, along with others across Europe.
But Garcia has held positive talks with City over the past few days, and has agreed to sign fresh terms.
He is expected to pen a long-term deal, taking his £12,000-a-week wages to £40,000-a-week plus bonuses.
The talented teenager has made it clear to Guardiola he wants to stay, and is happy with their plans for the future.