The 32-year-old is out of contract at the end of the season at the Etihad.
The German midfielder is happy in Manchester and has been offered an extension to stay.
But we reported earlier this month how the Cityzens were only willing to give him a 12-month deal.
Now Spanish publication SPORT are reporting that Gundogan has snubbed that offer and instead opted to sign for Barcelona.
They claim that the City skipper will pen a two-season package to move to the Nou Camp.
And that also includes the option of an additional 12 months.
However, due to the financial troubles at the club, he has also agreed to take a huge paycut on his current £140,000-a-week salary in order to “fulfil his desire” of wearing the Barcelona shirt.
The star has played nearly 300 games for the Cityzens since joining from Borussia Dortmund in 2016.
He was the first signing of the Pep Guardiola era.
BETTING SPECIAL – BEST FOOTBALL BETTING SITES IN THE UK
Gundogan was elected as club captain for the current campaign by his City team-mates after Fernandinho left.
He has won four Premier League titles, four League Cups and the FA Cup during his time at the Etihad.