The keeper, capped once for France, will undergo a medical at the Ligue 1 club before signing an expected four-year deal.
Had Ruffier made a City switch he would have likely found it tough to secure regular game time, with England international Joe Hart already established in the number one position.
The 24-year-old, who left Monaco following their relegation from the French top tier, says he did not feel City could offer him the same playing opportunities as Les Verts.
"On Monday afternoon, my agent received a phone call from Manchester City," Ruffier told L'Equipe. "However, for me the priority was to play at St Etienne, because sport is the most important aspect.
"Manchester City doesn't matter to me. I am not at City, I am at St Etienne and I am here for the sporting aspect. I was only attracted to playing."
City's apparent interest in the Frenchman fuels speculation that reserve keeper Shay Given could leave Eastlands this summer, with Aston Villa reportedly chasing his signature.
While Ruffier feels St Etienne can offer him more playing opportunities, he knows he will be in direct competition with veteran Jeremie Janot.
"Did I consider the presence of Jeremie Janot? No I didn't," he added. "I was just looking for a high level club where I could blossom, that's all.
"With Monaco suffering relegation to Ligue 2, I wanted to leave. To me it was essential to remain at a high level. That's why I chose St Etienne."