The 32-year-old is set to end his five-year association with the Citizens as they have reportedly accepted a bid of £34.7m from Al-Ahli to sign the winger.
Mahrez is set to undergo a medical on Thursday ahead of his proposed switch to Al-Ahli, where he will put pen to paper on a three-year contract.
The Algeria international contributed with 15 goals and 13 assists in 47 games during Man City's historic Premier League, FA Cup and Champions League treble triumph last season.
Mahrez has won a total of 11 trophies during his time at the Etihad Stadium including four Premier League titles, and he is now set to become the second high-profile Citizens star to depart the club after Ilkay Gundogan, who joined Barcelona on a free transfer earlier this summer.
While Mahrez is a notable absentee from Pep Guardiola's pre-season squad, Joao Cancelo has been included, with the Portuguese full-back returning to the Citizens set-up after spending the second half of last season on loan at Bayern Munich.
Cancelo has been tipped to leave Man City this summer amid uncertainty over whether he remains in Guardiola's plans going forward, but a departure is not imminent at present so he will join up with the City squad for their tour of Asia.
Fellow full-back Kyle Walker has also been linked with a summer exit, with Bayern Munich believed to be keen to lure him to Germany, but the 33-year-old has been named in Guardiola's squad.
It s understood that Walker has held crunch talks with Guardiola over his future at the club, but it remains to be seen whether the Englishman, who has just a year left on his contract, is in favour of a switch to the Bundesliga champions.
Man City's 25-man squad also includes Bernardo Silva, who is another that has been strongly linked with a summer departure amid interest from Al-Hilal, Paris Saint-Germain and Barcelona - the latter of whom remain in the race for his signature after club president Joan Laporta recently revealed that he "would like" to sign the playmaker.
In addition, Aymeric Laporte is also heading to Asia as Man City are yet to receive a suitable offer for the defender, who has been tipped to be sold as the Citizens pursue a move for top target Josko Gvardiol.
Man City's only summer signing thus far Mateo Kovacic has been included in the squad, along with Kevin De Bruyne who is currently recovering from a hamstring tear sustained in the Champions League final win over Inter Milan.
Last season's top scorer Erling Haaland, who netted a remarkable 52 goals in all tournaments, is also heading to Asia, while youngsters Rico Lewis, James McAtee, Oscar Bobb and Maximo Perrone have been included in Guardiola's squad.
Man City are scheduled to face Yokohama F Marinos and Bayern Munich in Tokyo in their first two pre-season friendlies next week, before heading to Seoul to take on Atletico Madrid on July 30.
Manchester City's 25-man pre-season squad in full:
Kyle Walker, Ruben Dias, Kalvin Phillips, John Stones, Nathan Ake, Joao Cancelo, Mateo Kovacic, Erling Haaland, Jack Grealish, Aymeric Laporte, Rodrigo, Stefan Ortega, Kevin De Bruyne, Julian Alvarez, Bernardo Silva, Sergio Gomez, Manuel Akanji, Ederson, Maximo Perrone, Scott Carson, Phil Foden, Oscar Bobb, Cole Palmer, Rico Lewis, James McAtee