The 'BBC' reports that the 24-year-old, who finished as the top scored in the Austrian top division last season with 17 goals in 33 games, is set to sign a four-year deal with Pep Guardiola's side and immediately join Spanish side Girona on loan.
The Nigerian had previously been linked with a move to Newcastle but he will now join fellow City players Douglas Luiz, Pablo Maffeo, Aleix Garcia and Marlos Moreno on loan at the Spanish side.
The deal has yet to be officially confirmed but it is believed that it will be in the very near future.
Kayode has made three appearances for Nigeria so far and made his debut for the 'Super Eagles' in a friendly against Senegal in March.
The 24-year-old was in fine form last season, scoring 24 goals in 48 games in all competitions for Austria Vienna, including two in two against Italian giants Roma in the Europa League.