The club announced on Wednesday that Sergio Ramos will leave Real Madrid after 16 seasons with the La Liga giants when his contract expires at the end of the month.
Madrid have scheduled a farewell ceremony for their longtime captain on Thursday in the presence of club president Florentino Perez.
Ramos, 35, wanted a new two-year deal to stay at Madrid, but sources told ESPN that Perez was unwilling to break his policy of handing only one-year contracts to players over 30.
Negotiations between Perez and Ramos have been going on for the past year and continued until June. However, neither side was ready to compromise.
Despite reports to the contrary, sources told ESPN that Ramos did not seek a pay increase to stay at the Santiago Bernabeu.
Ramos, who scored 101 goals for Madrid, has yet to make a firm decision about his future and is not expected to announce his next destination in Thursday's goodbye schedule.
ESPN recently revealed that Manchester City are at the fore in landing his signature, although there are other options on the table.
The Premier League champions are set to offer a two-year deal until the summer of 2023. From there, depending on performance and Ramos' own plans, the defender could either continue at City for a third season or opt to join the Major. League Soccer side New York City FC, also owned by Citi Football Group.
Ramos is a direct petition from City coach Pep Guardiola. The former Barcelona boss values the experience he will add to his squad and the competition and guidance he will provide for young centre-backs Ruben Dias and John Stones.
City also have Nathan Acke, but they have lost Eric Garcia on a free transfer from Barca and Aymeric Laporte could also leave after losing his place this summer.
Ramos turned 35 in March, but sources told ESPN that City manages data that suggests he is still able to perform physically at the level of "a player aged 28 to 30". .
ESPN first reported on January 4 that Citi was monitoring Ramos' situation. Guardiola's stubbornness has been the key for him to continue to follow development with Madrid.
Although the player's bloc isn't ruling out anything, several clubs have expressed interest in recent months.
Madrid signed Ramos from Sevilla in 2005, paying off his €27 million release clause.
He soon became a prominent member of the side and has won five La Liga titles, four Champions Leagues, four Club World Cups, three European Super Cups, two Copa del Rey and four Spanish Super Cups in 16 years at the club.
In that time, he has also won two European Championships with Spain and the World Cup, although injury problems forced him out of Luis Enrique's squad for Euro 2020 in 2021.
Ramos made just 21 appearances for Madrid in all competitions last season as Los Blancos ended the campaign without a trophy, missing out on the league title to rivals Atlético Madrid on the final day of the season.