After nine trophy-laden years with the Citizens, the 37-year-old will be leaving the Etihad Stadium when his contract expires on June 30.
The 53-cap Brazil international has been strongly linked with a return to his homeland for the latter stages of his career, and journalist Fabrizio Romano claims that he has agreed to join Paranaense.
Romano adds that talks have taken place between both parties over the last week and they have now reached an agreement over a two-year contract.
Fernandinho began his senior career with Paranaense back in 2002 and he spent three years with the Curitiba-based outfit before moving to Europe and joining Shakhtar Donetsk.
Man City boss Pep Guardiola is set to replace Fernandinho with Leeds United midfielder Kalvin Phillips after the club agreed a £42m deal to sign the Englishman last week.