By SABC Sport
15th August 2024
Everton and Fulham were also interested in the 28-year-old England international, who has fallen out of favour at City, but he has opted for last season's Championship runners-up.
A loan deal has reportedly been agreed in principle and Phillips is scheduled to have his medical on Thursday.
Ipswich face a race against time if they are to register Phillips in time for him to be eligible for the visit of Liverpool in Saturday's 12.30pm kick-off.
Phillips's £42million move to City in 2022, when he signed a six-year deal, has failed to pay off after struggling to impress manager Pep Guardiola.
He spent the second half of last season on loan at West Ham but made only three starts in 10 appearances, one of which lasted just 45 minutes and another which ended in a red card.
Meanwhile, Sheffield United have signed highly-rated goalkeeper Michael Cooper from Plymouth for an undisclosed fee.
The 24-year-old, who made his professional debut six years ago, has signed a long-term contract at Bramall Lane.
He said on the club website: "It feels brilliant that we've got the move over the line and I'm excited to get started.
"The manager couldn't speak highly enough of the club, the fan base, the ambition, the squad - it was all very attractive for me to make a decision to come here.
"This is a huge opportunity in front of me. I have had a lot of great memories at Argyle, but when an opportunity like Sheffield United presents itself, it is almost impossible to say no."