The Englishman has struggled for minutes in the last few seasons, in addition to a disappointing loan spell at West Ham in the previous campaign.
Despite travelling with Man City to the United States as part of their pre-season tour - where he featured as a central defender - Phillips failed to impress Pep Guardiola, who says his player 'knows the situation'.
Moreover, the England international failed to make an appearance in City's Community Shield win against Manchester United.
The 28-year-old has four more seasons on his current contract and the Citizens have been looking for a loan exit for the player.
Kalvin Phillips is given another chance to revive his career, being close to complete his season-long spell with a newly promoted Premier League club
Mail Sport understands that one Premier League newcomer, Ipswich Town, are close to finalising the deal for a season-long loan for Kalvin Phillips.
This would mean another significant signing for the Tractor Boys, who have completed deals for players such as Omari Hutchinson, Jacob Greaves, or Liam Delap.
Mail Sport previously reported that several Premier League sides, including Everton and Fulham, were interested in signing Kalvin Phillips.
However, it appears that Kieran McKenna's side are closing in on a deal to sign Phillips.
Phillips, 28, was signed by City from West Ham United ahead of the 2022-23 campaign for £42million.
The Englishman featured in only 21 games during Man City's treble-winning season, as the club's boss, Pep Guardiola, struggled to integrate the player into the starting lineup.
He spent the second half of his next campaign on-loan at West Ham but often watched the Hammers' games from the sidelines, making just 10 appearances.