The England winger has a little more than 18 months remaining on his current contract, but Sky Sports News reported on Thursday that the new deal is set to be signed in the next few weeks.
Sterling has scored four goals in eight Premier League appearances for City this season and has played a large part in helping Pep Guardiola's side reach top form in their domestic campaign this season.
Negotiations over a new contract have lasted for almost a year and were first reported in December 2017, when Sterling started the 2017-18 campaign—by far the best of his career to date—in prolific fashion.
Sami Mokbel and Jack Gaughan of MailOnline reported Sterling will become the highest-paid Englishman in the Premier League with a new salary worth £300,000 per week. That's not far from double his current wage of £180,000 per week.
Mokbel wrote for the Daily Mail in October that Real Madrid were keen on in-form Sterling, and Bleacher Report's Dean Jones spoke of the speedster as a respected member of Guardiola's juggernaut:
According to Sky Sports, the forward's representatives have reached an agreement with City director of football, Txiki Begiristain, over a new deal running until the summer of 2023.
Sterling scored 23 goals in 46 appearances across all competitions last season and has again helped City take to the Premier League summit, where they hold a big goal advantage over joint-leaders Liverpool.
The winger was expected to take his game to new heights when he left Anfield for Manchester in 2015, but only now is the 23-year-old displaying the consistent levels of elite quality that were hoped of him.
He most recently demonstrated that talent with an electric assist to set up City's winner in Sunday's 1-0 defeat of Tottenham Hotspur at Wembley, which impressed TalkSport's Alan Brazil and Dean Saunders:
One would have to wonder why City might be willing to let such an integral part of their squad leave, especially after his form of the last 18 months, per Match of the Day:
The Alan Brazil Sports Breakfast @SportsBreakfast
🗣️ Brazil: "Sterling... what a difference!" 🗣️ Saunders: "He's doing things I didn't see him doing last season!" 👏 Alan and Dean are full of praise for #ManCity's @Sterling7 after creating another goal last night! Is Sterling the finished article now? 🤔 https://t.co/PuhTjBaFsB
Kevin De Bruyne signed a new five-year contract with City in January and was followed by manager Guardiola in May, while striker Sergio Aguero penned a new deal until 2021 in September, per The Independent's Mark Critchley.
Securing Sterling's future will be one key to preserving their state of power as the club look to reward arguably their fastest rising commodity.