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The 29-year-old has been at the centre of a colossal transfer-tussle this summer with Wigan, Millwall, West Brom, Cardiff and Reading all jostling for position as they each attempted to sign Murray.
City Chairman Steve Lansdown revealed that they eventually decided to let Murray go due to his desire to prove himself in a higher league.
Speaking to bcfc.co.uk the Lansdown said: "I had a phone call from Scott last Monday, which really proved the turning point as far as his future with us was concerned. He expressed a wish to play in the First Division, which is wholly understandable, and that put a new light on things.
"There are still some details to finalise, but that should be done over the next day or two.
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Alan Pardew, who was said to be the most serious of all the manager's about securing Murray's signature, eventually got a deal for £650,000, some way short of the £1 million fee the Ashton Gate side were originally after.
Reading had had two previous bids for the winger's services rejected. A £500,000 bid was deemed too low by City, and a player-plus-cash deal was not what City wanted.
Murray wears number seven for Bristol City and will likely be given the same number if his transfer to the Royals is completed. Current number seven, Anthony Rougier, is being released by the club, freeing up the shirt.
As no player-plus cash deal emerged Martin Butler will not find himself in Bristol City attire next season. Butler, who is reportedly surplus to requirements at the Madejski, is said to be keen to stay and fight for his first team spot. It looks as if he could get that chance.
Murray may be joined at the club by Danny Cullip and Teddy Sheringham, both have strongly been linked with a move to the Royals in recent days.
Cullip has reportedly already agreed a three-year contract with Pardew's side, whilst 37-year-old Sheringham could yet snub a move to Premiership newboys Portsmouth and opt for Reading instead.