The Portuguese is set to end Pep Guardiola’s long wait for a defender after agreeing a switch, with Nicolas Otamendi going the other way
Benfica announced on Sunday night that they had reached an agreement over the sale of the 23-year-old in a deal worth an initial £62 million ($79m) plus £3.3m in potential add-ons.
City defender Nicolas Otamendi will move in the opposite direction in a separate deal worth £14m ($17m).
Both players still need to finalise their moves by signing their contracts and Otamendi is yet to have a medical with the Portuguese club.
But City’s capture of Dias ends an 18-month wait to sign a replacement for former captain Vincent Kompany and comes after Pep Guardiola conceded five goals for the first time in his career as a coach in Sunday’s 5-2 defeat by Leicester.
Dias has been a regular for Benfica since emerging through the academy ahead of the 2017-18 campaign and has been watched by a number of top clubs through Europe – with City tracking his progress for two years.
He will become the club’s record signing if the extras are met but City believe they are paying a good price for a player with the potential to improve.
Dias signed a new contract in 2019, with a release clause believed to be worth €100m (£90m/$128m), but Benfica needed to sell after failing to qualify for the Champions League group stages.
Guardiola has been desperately short of options in defence for a partner to Aymeric Laporte since Kompany left in May 2019.
Otamendi, 32, has struggled for form and John Stones has suffered with injuries and consistency issues, meaning the City boss had to turn to veteran midfielder Fernandinho and Academy player Eric Garcia.
City bought Netherlands international Nathan Ake for £40m ($53m) from Bournemouth in the summer but wanted to add a right-footed central defender as well.
As well as being strong and full of potential, Dias is also seen as a leader, having captained Benfica’s Under-17s and U19s.
He was made Benfica captain for his final appearance in the 2-0 victory over Moreirense, during which he scored and was close to tears as he said goodbye to the club he has been with since the age of 11.
Guardiola’s side have not kept a clean sheet in their opening three matches of the season and could have their new signing available for Saturday’s clash with Leeds United after an injury crisis has left them short of options.