The 26-year-old was the subject of a bid from City in January that was rejected, but now Manuel Pellegrini's side have returned to re-open talks.
Now a deal, reportedly worth £16million, is close to being completed with the player expected to arrive in England this week to undergo a medical.
Speaking to Maisfutebol, his agent Antonio Araujo stated: "Everything is in Porto's hands and we hope to finalise the transfer by the end of the week.
"Fernando is in the city of Porto waiting for Porto tell him their decision about the documents they have received so that he can travel immediately [to Manchester]."
Fernando is not at the World Cup finals having not been called up by his native Brazil, while earlier this year he was ruled ineligibe to play for Portugal, for who is now a naturalised citizen.
Because he now has a Portuguese passport, City no longer require a work permit to sign the midfielder.