Aguero's contract at the Etihad Stadium will expire in the summer when he will leave on a free transfer.
"Sergio's contribution to Manchester City over the past 10 years cannot be overstated," chairman Khaldoon Al Mubarak said.
"His legend will be indelibly etched into the memories of everyone who loves the Club and maybe even in those who simply love football.
"This is not yet the moment for farewell words and speeches. There is still much to achieve in the remainder of the time we have with Sergio, and we look forward to his contributions to the challenges which lay ahead."
Aguero, 32, has been slowed with injury problems for more than a year and has been limited to just eight Premier League appearances this season, scoring once. He has started just two games since October.
In a statement released on social media, Aguero said he felt "a huge sense of satisfaction and pride" for his ultra-successful 10 years at City.
"I was to join during the reconstruction era of 2011, and with the guidance of the owners and contributions of many players, we earned a place among the greatest of the world," he said.
"The task to maintain this well-deserved privileged position will remain on others. As for myself, I will continue to give it my utmost for the rest of the season to win more titles and bring more joy to the fans. Then, a new stage with new challenges will begin, and I am fully ready to face them with the same passion and professionalism that I have always dedicated to continue competing at the highest level."
"It gives me great pleasure to announce that we will be commissioning an artist to create a statue of Sergio to live at the Etihad Stadium alongside the ones under construction for Vincent [Kompany] and David [Silva]," Al Mubarak said.
"And we look forward to the opportunity to bid Sergio a fitting farewell at the end of the season."