The 30-year-old has publically expressed his desire to return to Spain this summer following a solitary campaign in England which saw him make just nine Premier League starts.
The last of those came on Boxing Day as Nolito fell out of favour with Pep Guardiola during the second half of the season.
However, he has now agreed terms which will keep him at Sevilla until 2020, subject to passing a medical in Spain on Sunday.
Nolito had also been linked with a return to Celta Vigo, but financial restrictions saw his former club effectively ruled out of the race as Sevilla got their man.
In all, Nolito made 30 appearances for Man City across all competitions, scoring six goals.