Reports in Spain have indicated Pep Guardiola already has a verbal agreement with Manchester City for the 16-17 season.

The media in Chile is now reporting Manuel Pellegrini will retire at the end of the season to be replaced by Guardiola.

Pellegrini signed an extension in August with City that runs through the 16-17 season.

Pellegrini is 62 and has been managing since 1988.