The veteran Brazilian midfielder will leave City nine years following Sunday’s final Premier League game of the season against Aston Villa.
Predecessor Unai Emery was sacked within six months of missing out on the top four by a point in 2019.
The Reds face Wolves at the weekend needing to better City’s result against Aston Villa to win the title.
The Italian was appointed in November and is on the brink of delivering Champions League qualification.