Wolfsburg have confirmed they hope to complete imminently the sale of Kevin De Bruyne to Manchester City for a fee believed to be £54m, after City made the player an “astonishing offer” to join them.

Speaking in Monaco after City’s tough draw in the Uefa Champions League group stage, Brian Marwood, City’s head of football administration, acknowledged the club are interested in signing the midfielder to extend the expensive strengthening of their squad and challenge for success in the Champions League.

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Marwood said City were “hurt” and disappointed by last season’s second place in the Premier League and failure to progress beyond the last 16 in the Champions League, and said City’s Abu Dhabi ownership is sanctioning spending to improve that record, but he declined to be specific about the De Bruyne deal until it is done.

“Everybody is aware we are interested in this player,” Marwood said, “but until anything is done it’s not appropriate for us to make any comment.”

However, Klaus Allofs, Wolfsburg’s general manager and former striker for West Germany, confirmed in Monaco that negotiations with City are continuing, saying he hoped the deal will be finalised on Thursday night or Friday morning.

“During the day we have gone on with negotiations and we’ve got closer to each other,” Allofs said, after Wolfsburg drew Manchester United, CSKA Moscow and PSV Eindhoven in Group B. “But the deal is not already done. So hopefully we will find an end tonight or tomorrow morning.”

Marwood, speaking after City were drawn to play last season’s beaten finalists Juventus, the Europa League winners, Sevilla, and Borussia Mönchengladbach, said City’s spending, including the £49m signing of Raheem Sterling from Liverpool, is to fuel their ambition to progress in the Champions League.

“We want to get as close to winning it as we possibly can,” Marwood said. “We’re in it to compete, not just to get through the group stage; it has to be more than that.

“We haven’t been shy of spending money over the years because we have an ambition to be successful. Last year was a disappointment – that is how we are measured now. We were hurt by not winning [the Premier League] last year and not doing better in the Champions League.”

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Wolfsburg do not want to sell de Bruyne, insisted Allofs, who as general manager at Werder Bremen signed the midfielder on loan from Chelsea in 2012, then brought him to Wolfsburg for an £18m fee last January. However, following an outstanding season in which the Belgium international contributed 16 goals in all competitions as Wolfsburg finished second in the Bundesliga, Allofs said City made De Bruyne personally an “astonishing offer”, so his club was forced to negotiate.

Allofs would not confirm the scale of personal terms City have offered to De Bruyne, expected to be around £250,000 per week, nor the fee Wolfsburg themselves are negotiating, but said the impending sale illustrates the financial power of the Premier League compared to the Bundesliga, Europe’s second richest league. As a club wholly owned by the German car giant Volkswagen, unlike most in the Bundesliga which are controlled by their supporters, Wolfsburg are backed by large financial resources and are not a selling club, he said.

“Kevin still is a key player for Wolfsburg. It is a big blow if he is leaving Wolfsburg but, you know, it’s a difficult situation,” Allofs said. “He has an astonishing, astonishing offer from City and we can’t compete with that. We had to take it seriously, that is the way we react with our players, and finally we decided to start negotiations with City.”

Because of the Premier League’s huge TV deals now and the expected £8bn deal for 2016-19, Allofs said: “It will be very difficult – apart from Bayern Munich – [for Bundesliga clubs] to compete with the Premier League in the future.”