EXCLUSIVE: The Bundesliga club will take the Serbian, who has fallen out of favour at the Etihad Stadium, on loan with a view to a permanent €13 million transfer in the summer

By Paul Clennam Schalke have reached an agreement with Manchester City over a deal for defender Matija Nastasic The centre-back, who has fallen out of favour at the Etihad Stadium, will join the German club initially on loan but with a a view to a €13 million permanent transfer in the summer.Goal understands Roberto Di Matteo's side, who are currently fifth in the Bunesliga table, will pay Nastasic's €95,000-a-week wages in full during the six-month loan period.Negotiations between the two clubs have been ongoing over the past two weeks, with Schalke unable to afford a permanent transfer in January and having only been willing to pay €10.5m for the Serbia international.The Bundesliga club have, however, now agreed to meet City's €13m valuation at the conclusion of the 2014-15 campaign at a point when they will have more funds available for transfers.Nastasic has been frozen out at City and has only featured in one game thus far this season - the 3-0 Community Shield defeat to Arsenal back in August.The 21-year-old was initially offered to Premier League rivals Tottenham and Arsenal back in November for a cut-price fee but is now set to complete a switch to Schalke with an official announcement expected in the coming days.