The 18-year-old is regarded as one of the most promising young players in Europe and has been at the City Football Academy since 2017 when he joined from Port Vale.
Ndala was part of Pep Guardiola's first-team squad for the club's pre-season tour of the United States in the summer and made substitute appearances in friendlies against Celtic and Chelsea.
The winger had previously scored 20 goals and provided 11 assists in 68 appearances at youth level for Man City, making 11 of those appearances in the Premier League 2 last season.
Ndala, who has also represented England from Under-16 to Under-18 level, is rated highly by the Citizens and still has four years remaining on his contract at the Etihad Stadium.
However, according to The Athletic, the youngster is set to undergo a medical on Monday ahead of completing a move to PSV Eindhoven on loan with a conditional obligation to buy.
Man City could earn up to £8.4m from Ndala exit
The report adds that PSV have beaten a host of European clubs, including Serie A giants AC Milan, to win the race for Ndala's signature.
Ndala has agreed to join the Eredivisie club on an initial temporary basis for the 2024-25 campaign, but the move will be made permanent - should certain performance-related criteria be met - as an agreement has been reached on a fee of around €7m (£5.9m) rising to €10m (£8.4m) and a contract running until 2029.
It is claimed that Man City will retain clauses enabling them to buy Ndala back or earn a significant percentage of a future sale.
Ndala is set to become the 29th player to leave Man City this summer either permanently, on loan or following the expiration of a contract, with the Premier League champions generating in excess of £145m from player sales alone.
High-profile senior players including Julian Alvarez, Joao Cancelo, Sergio Gomez and Kalvin Phillips have all departed the club, the latter has joined Ipswich Town on loan.
Several youngsters have also opted to seek pastures new including Liam Delap, Taylor Harwood-Bellis, Micah Hamilton, Alex Robertson and Ben Knight, with Ndala soon to follow as he is now ready for regular first-team football.