The Serie A club have been in negotiations with City over the transfer of the 22-year-old striker, who was omitted from the squad to face Queens Park Rangers tonight.
It was reported on Tuesday that a fee had been agreed and Mancini has confirmed that the move is likely to be concluded after Balotelli passes a medical and finalises personal terms.
Mancini said: "Both clubs are talking about Mario Balotelli. Maybe tomorrow they can close. I think Mario needs to do a medical.
"We are very sorry. We love Mario, Mario likes the players but I think he had this big chance to come back to Italy and to play for another top club like Milan.
"I hope Mario can improve and can show he is ready because I think if he works hard he can continue his growing and can become one of the best players in Europe."
Without Balotelli, City were held to a goalless draw at Loftus Road this evening.