Jo, 24, is flying to his homeland after accepting Internacional's offer, but must conclude the deal before the Brazilian transfer window closes at midnight on Wednesday.
Damiao signed an extended contract this week, but, rather than ruling out his departure, the deal was put together to strengthen the Porto Alegre club's ability to demand a bigger fee.
Goodbye: Brazilian striker Jo (right) is leaving Manchester City after three unsuccessful years
Tottenham have already had two bids rejected for the 21-year-old - the last reaching ?12million - but remain keen on the striker who has scored 24 goals in 29 games this year.
Damiao, who made his Brazil debut against Scotland in March, has signed a seven-month extension to his five-year contract, which significantly raises his wages and pushes his release clause above ?20m.
Internacional have been expecting an improved ?15m bid from Spurs but have tried to drive up the price by insisting another 10 clubs have shown interest.
The 2010 South American champions are short on cash and will look to sell either Damiao or 19-year-old midfielder Oscar, who has attracted interest from Barcelona.
Heading for Europe: Internacional say that many leading clubs are chasing Leandro Damiao (right)
As well as bringing in Jo, they are stocking up the squad ahead of the likely sales by making moves for Malaga's Sandro Silva and Dnipro Dnipropetrovsk's former Chelsea defender Alcides.
Internacional president Giovanni Luigi said: 'Inter will have to sell and over the next week there may be a major deal.'
The club hope that any deal for Damiao or Oscar will include them being able to stay until the end of the year, but Spurs boss Harry Redknapp is keen to add a striker this summer. It is thought Jo will sign on loan until the end of the year, but neither City or Inter have confirmed the deal yet so details are sketchy.
However, the striker announced on Twitter: 'I am very happy with the deal with Internacional of Porto Alegre.
Cheerio: Carlos Tevez is another South American striker on his way out of City
'I hope I can give my best to help this team! Anyway, thank you all. Soon I be leaving happy to sign the contract.
'Returning after six years is an immense pleasure. I have to pack my bags to leave for Brazil.'
Jo has just a year left on the contract he signed when leaving CSKA Moscow for Manchester City in a then-club-record ?18m deal in 2008. However, he has failed to make an impact and was handed just three starts in the Barclays Premier League last season.
CSKA Moscow were interesting in taking him back loan but, after previous short-term stints at Everton and Galatasaray, a return to Brazil was too tempting to turn down.
The former Corinthians man joins a club in disarray. On Monday Internacional sacked Brazil legend Falcao after just three months as head coach and they also dispensed with director of football Roberto Siegmann.
Internacional struggled in defence of their Copa Libertadores title this year and are well off the pace in the Brazilian Serie A.?
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Source: Daily Mail
Source: Daily Mail