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I’ve heard of it happening but usually after the interviews go well and you get the offer to move. Whenever your current manager is notified (or if you notify them), there’s always a possibility of them shutting it down in different ways. That said, a good manager would actually know that it’s beneficial for their employees to grow and expand their experience through other roles.
If everyone follows policy, your manager will not be informed until after you have been offered and have accepted the new position. You will typically be given the opportunity to tell your manager yourself. (And if you have a good relationship with him/her, you should do this.)
Generally, your manager is then expected to work with your new manager on a transition plan. Two weeks is pretty typical. If you're working on a critical project, your current manager can request that your transition period be longer.
Having said that, there are always managers that break the rules or say something that they shouldn't. But in my experience, most managers support internal transfers because it leads to engineers working on projects that they're passionate about (instead of being stuck on one that they don't care about).
There are specific documented HR rules for internal transfers. You should find them and read them.