Sky sources understand the two clubs had agreed a fee of £26.3m for one of the stand-out players in the Bundesliga in recent seasons.
A Dortmund statement read: "After intensive discussions BVB have complied with the wishes of the Armenian national team player to join Manchester United."
United have not yet confirmed the transfer, but Dortmund chief executive, Hans-Joachim Watzke, said in a statement: "Manchester (United) made us an enormously lucrative offer Had we rejected it the player would have left in 2017 without a fee and we would have just delayed the issue for a year."
An attacking midfielder, Mkhitaryan captains Armenia and joined Dortmund in 2013 from Shakhtar Donetsk for £23.5m.
He scored 18 goals and 25 assists last term for the German club, featuring prominently in the Europa League matches against Liverpool and Tottenham, and was named the Bundesliga Players' player of the season.
Capped 59 times by Armenia, he is their all-time leading goalscorer, having been on target 19 times for his country.
He becomes United's second marquee signing in 24 hours following the confirmation of Zlatan Ibrahimovic's arrival at Old Trafford.
(Sky Sports)
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