According to reports in British media, the two clubs have reached an agreement on a fee of £53 million for the 25-year-old.

City are looking to strengthen in midfield after an injury to their Belgium international Kevin De Bruyne, who is sidelined for at least four months.

“The situation is resolved, he (Nunes) is signing for Manchester City,” O’Neil told reporters ahead of Wolves’ trip to Crystal Palace on Sunday.

Nunes, who has 11 caps, moved to Wolves from Sporting last August for a club record fee reported to be around €45 million.

He had stopped training with the squad as he tried to force a move to Pep Guardiola’s City after Wolves reportedly rejected City’s opening bid of around £47 million last week.

Asked what had changed after the initial rejection, O’Neil said: “The offer. At that point it was a lot lower and we weren’t going to accept …

“If he had rejoined the group I would have told him what I felt. When I dealt with him before he worked hard and did what he could for the club. Then a big club came calling and players want to play for Manchester City. We move on.”