The Chinese international has been at City since 2002 and passed 100 appearances for the Blues this season, in which he has made 15 starts and 13 substitute appearances in the league.
"Everything's been agreed with him," City boss Stuart Pearce told the City website. "He was due to sign on Saturday but we're just in the process of translating the deal into Mandarin.
"The fact that he can play in several positions is a bonus. I know he can play anywhere along the back four and anywhere in midfield if I wanted him too.
"He's a good man to have about, a good professional who takes care of himself, and that's what you want."
Sun scored in a 2-0 victory for the reserves against Liverpool last night. That win saw them finish third in the table.