The 23-year-old broke into the Benfica team last March and has made 37 appearances for the club.

"Benfica has reached agreement with Manchester City for the amount of 40m euros," the club told the Portuguese stock exchange.

They also confirmed 50% of the fee will be paid to "third parties".

City sources say the transfer cannot be concluded until the third-party element is resolved to the Premier League's satisfaction.

After Sunday's 2-1 Portuguese Cup final win over Vitoria Guimaraes, Moraes said it was "probably" his final appearance for Benfica.

The Brazil Under-23 cap is yet to make his full international debut, but is in the squad for the forthcoming friendlies against Argentina and Australia.

City manager Pep Guardiola has been interested in Ederson for some time and made room in his squad by releasing Willy Caballero on Friday.

Earlier this week, the club's England goalkeeper Joe Hart confirmed he would be leaving Torino after a season-long loan.

Ederson's arrival will place more pressure on Claudio Bravo, who has had a torrid time after arriving from Barcelona to take over from Joe Hart as City's number one.

Guardiola made his first move of the summer with the £43m signing of Monaco's Portuguese playmaker Bernardo Silva on Friday.

He is also understood to be interested in Monaco and France full-back Benjamin Mendy, 22.

Analysis

Third-party ownership of players, when someone other than the club has a stake, has been a thorny issue in England ever since West Ham signed Argentina duo Carlos Tevez and Javier Mascherano in 2006.

They may be commonplace around the world but such situations are not allowed in English football. West Ham were fined £5.5m for breaching the regulations but escaped a points deduction and retained their Premier League status on the final day of the season.

Now, the Premier League takes far more notice - and clubs are acutely aware of their obligations.

However, the complex nature of contracts mean changing a player's status takes time - and a lot of legal advice. That is where Ederson and Manchester City are.

So, while a fee is agreed and salary confirmed, this transfer will not be concluded until everyone - including the Premier League - is satisfied.

'There's a bit of Manuel Neuer in him'

Ederson Moraes made seven Champions League appearances this season

South American football expert Tim Vickery on BBC Radio 5 live:

Ederson is a very different kind of keeper to Claudio Bravo in that he is bigger, much more physically imposing, and much younger.

He has ability with his feet and has a howitzer of a big kick, which paradoxically could help City play out from defence by forcing the opposing press back a bit. He looks confident on the ball, but how he copes with that style will be very important to how he does at the club.

There seems to be a bit of the Manuel Neuer in him. He's big and commanding; there's that chest of steel when he comes off his line very quickly. He looks a very promising goalkeeper indeed, but I'm not sure what his English is like, so communication could be a problem.

Would this be a world-record fee for a goalkeeper?

Gianluigi Buffon's world-record move for a goalkeeper from Parma to Juventus in 2001 was reported to be worth 53m euros, or £32.6m at the time.

But at current exchange rates, Ederson's 40m euros transfer is equivalent to £35m. It would be a world record in sterling, but not euros.