Manchester City are on the brink of completing a deal worth around €40 million (£34.2m) to sign Chelsea midfielder Mateo Kovacic, sources have told ESPN.

Talks between the two clubs have progressed well in recent days with a broad agreement on the fee leading to more detailed conversations about how the payments are structured.

One of the few remaining outstanding issues centres on how much City will pay Chelsea up front. The west London club are under pressure to raise funds through player sales by the end of this month after spending in the region of £600m during the first year of Todd Boehly and Clearlake Capital's ownership of the club only to miss out on European qualification altogether.

Any outgoings completed before June 30 will fall under the first full tax year and therefore help mitigate losses to aid compliance with Uefa's Financial Fair Play rules.