The 21-year-old is expected to make the move to the Walkers Stadium at some point over the summer after rejecting a new contract offer with the Imps.
Lincoln will be due a fee for the former Boston star because he is under 24 and their chairman Steff Wright admits a deal could be struck at the Football League's annual meeting in Portugal next week.
"We are in negotiations with Leicester City regarding a compensation package for Dany," Wright told the Lincolnshire Echo. "The Leicester chief executive is away at the moment.
"But myself and (Lincoln chief executive) Dave Roberts will be attending the Football League's annual meeting in Portugal next week. A lot of business gets done out there as we're all in the same place.
"To our knowledge, Dany has not agreed terms with Leicester, but as he is a free agent, that is his business. He may well have done. For us to start negotiating a fee with Leicester is par for the course. That will be the fee if and when Dany agrees personal terms."