The Italian club revealed on Twitter that the Montenegro international will arrive in Milan on Monday ahead of his move from the Etihad which will reportedly be a two-year loan deal.
The forward joined City from Italian club Fiorentina for £22million in July 2013 but has struggled to hold down a first-team spot at the Etihad due to a succession of injuries.
At the end of his two seasons in Milan – should he successfully pass his medical – he will have 12 months remaining on his City contract.
Jovetic began his career with Partizan Belgrade but has started only 11 league games for City and has made a further 19 appearances from the bench, scoring eight goals.
The 25-year-old Jovetic scored 40 goals in five seasons in his first spell in Italy with Fiorentina despite missing the 2010-11 campaign with a cruciate ligament injury.
He made his international debut in 2007 and has established himself as a key figure in Montenegro’s attack alongside the experienced Mirko Vucinic.