Danilo, whose move is subject to receiving a work permit, joined LaLiga champions Real Madrid for €31.5million in the summer of 2015 after helping Porto to back-to-back titles in the Portuguese top flight.
City, now in the United States for the first leg of their pre-season tour, begin their league campaign with a trip to face newly-promoted Brighton & Hove Albion on August 12.
The English Premier League giant, which has already raided Monaco in the close season having signed Silva, on Sunday welcomed another full-back, Real Madrid's Danilo. "I am a leader, someone who always has a smile on his face".
And he is looking forward to meeting up with his team-mates ahead of the new season. "I just hope to help him out as he expects".
"Danilo is a fine player who offers great versatility", said City director of football Txiki Begiristain.
"There were heated discussions, searches on the computer, revising techniques, detailed analyses and enactments of positional play which, at one point, included Trueba (Guardiola's friend) man-marking a chair", reads Guillem Balague's 2012 Pep Guardiola biography "Another way of winning". Coach Leonardo Jardim likes to say that when Mendy is on the pitch, players feel safe.
"He (Guardiola) told me I'm ready and that I can play in several positions, right-back, left-back, midfield".
In contrast, it may not be too helpful to City in terms of shipping him out with this report going public, as question marks will undoubtedly be raised about his attitude.
City, who recently forked out £50m to sign Tottenham right-back Kyle Walker, have been chasing the France worldwide all summer and have finally managed to get their man. In, The Sun claims transfer talks with PSG have broken down, while The Times report that City will bid £50m if Arsenal change their stance and allow the Chilean to leave.
Kompany was speaking at the Manchester City Soccer Festival on the site of the club's long-standing community project in East LA.
Pep Guardiola has already lavished nearly £90m on Mendy's former team-mate Bernardo Silva and Benfica goalkeeper Ederson Moraes, meaning Mendy's signing will take City's close-season investment beyond £200m.