Madrid, Jun 22 (IANS): FC Barcelona have agreed to sign Manchester City midfielder Ilkay Gundogan on a free transfer, after the German opted not to renew his contract with the Premier League and European champions.

Sources in Spain report that the 32-year-old has agreed a two-year contract with Barcelona with the option for a third, and he will be formally presented as a new Barca player after his contract with Manchester City expires at the end of June.

It is thought one of the reasons Gundogan opted to join Barca was that they offered him a longer contract than the one on the table at City, with the English club reluctant to offer a long-term deal to a player approaching the end of his career, a Xinhua report said.

Gundogan will fit perfectly into the Barcelona midfield as the replacement for Sergio Busquets, after the veteran confirmed he was leaving the club at the end of last season.

The German international played a huge role in Manchester City's treble winning season, scoring eight goals in 31 Premier League appearances and netting both goals in his side's 2-1 win over Manchester United in the FA Cup final.

Manchester City have moved quickly to cover his departure by signing Croatian international Mateo Kovacic from Chelsea in a deal thought to be worth around 30 million pounds (38 million U.S. dollars).

Kovacic continues the Chelsea exodus, with N'Golo Kante moving to Saudi Arabia, and Kai Havertz, Callum Hudson-Odoi, Mason Mount and Hakim Ziyech all expected to leave the club in the coming days.