After months of negotiating over Trafford’s position, the Magpies finally had an offer accepted by Burnley for the transfer of the goalkeeper.
However, Manchester City, who had inserted a buyback clause into the deal that took Trafford to Turf Moor from the Etihad, had to be informed of the agreement and offered the opportunity to match it.
City officials opted to make an offer of their own, which Burnley had to accept, and Trafford has agreed to move to the Etihad Stadium.
The 22-year-old will sign a five-year deal with Manchester City, who will also have the option of extending the contract by another 12 months.
Trafford’s arrival is likely to herald the exit of long-term City number two Stefan Ortega, with the England hopeful set to compete with Ederson for Pep Guardiola’s number one spot next season.
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While Ederson has been one of the standout goalkeepers in the Premier League in the last few seasons, Trafford is understood to have been assured that he will be given a realistic chance of usurping the Brazilian in the pecking order.
Missing out on Trafford is a major blow for Newcastle, who had identified the Cumbrian as their long-term successor for Nick Pope. The Magpies hierarchy had hoped that both players could compete for the number one spot next season.
Instead, Newcastle officials will now reassess their options and decide whether to pursue another goalkeeping target this summer or stick with their current options, which include Martin Dubravka, Odysseas Vlachodimos and John Ruddy.
Dubravka was not part of the Newcastle squad that flew to Singapore yesterday for the first part of their Asian tour, but the Slovakian is now expected to join up with his team-mates in South Korea for the second half of the trip.
Dubravka has been linked with moves away from Tyneside for most of the last year, and came close to leaving for Saudi Arabia in January, but the 36-year-old is contracted to the end of next summer.
Missing out on Trafford is merely the latest in a long line of transfer setbacks Newcastle have endured this summer. Approaches for Dean Huijsen, Liam Delap, Bryan Mbeumo, Joao Pedro and Hugo Ekitike all ended in failure, with all five of the players heading elsewhere.