City bid over £30million for the Tottenham ace today but the champions have now matched that shock offer.
And the champions are confident of wrapping up the deal before the transfer window slams shut at midnight.
Berbatov is now understood to have headed to United's Carrington training ground for talks over his switch to Old Trafford.
But City are still hopeful that they can hijack the transfer.
Boss Mark Hughes said: I am as stunned and excited by this as the fans are.
I think its agreed between ourselves and Tottenham. And now really its down to the boy to make a decision.
The fee is reported to be in excess of the British record £31million that Chelsea paid AC Milan for Andriy Shevchenko.
City are ready to splash the cash after being taken over by a super-rich Arabian investment group.
KRAZILY INSANE!