The Premier League champions will pay Leicester £80m to sign the England international.
United had been heavily linked with the central defender, but City have won the race after agreeing to a £280,000-a-week contract.
Pep Guardiola has settled on Maguire as a replacement for Vincent Kompany, who left the club at the end of last season.
The former Hull centre-half will displace Virgil van Dijk, signed by Liverpool for £75m in January 2018, as the most expensive defender in the world.
United boss Ole Gunnar Solskjaer will now turn his attention elsewhere as he attempts to bolster his defensive options ahead of the 2019/20 campaign.
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