The 32-year-old defender has not said where he will go but is one of the first names to confirm his departure in what is expected to be a busy transfer season for coach Pep Guardiola as he seeks to make his side more competitive.
Zabaleta, who joined City in 2008 from Espanol and made 332 appearances, is expected to play his final home game at the Etihad Stadium against West Bromwich Albion on Tuesday.
(Reporting by Andrew Downie, editing by Pritha Sarkar)
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