The 23-year-old is one of European’s most promising young players and is being viewed as a long-term replacement for the ageing Fernandinho at the Etihad Stadium.
Dortmund are keen to keep hold of the youngster but could be resigned to losing him if City put their full weight behind a transfer bid in the January transfer window.
Barcelona are interested in signing Sassuolo star Domenico Berardi, according to Sport.
The Catalan giants are seeking fresh faces in January after failing to recruit a big-name striker this summer.
But with manager Ernesto Valverde targeting success on both La Liga and Champions League fronts, more attacking flair is required at the Camp Nou.
Berardi, 24, has been the subject of interest from some of Europe’s top clubs, and Barcelona are ready to prepare a bid before other clubs nip in ahead of them.
It is believed the Italian international, who has scored 60 goals in 182 appearances at Mapei Stadium, would be available for around £22m-£27m
Sergej Milinkovic-Savic was offered an €8million-a-year deal this summer to join a club in France, according to agent Mateja Kezman.
Given the figure mentioned, the club is most likely Paris Saint-Germain, one of a host of Europe’s leading clubs who were said to be interested in the Lazio midfielder, a list that includes Real Madrid and Manchester United.
“Many teams were after Sergej and we presented a couple of very interesting offers to Lazio. He could have earned much more elsewhere – in France they offered him €8 million,” Kezman told La Gazzetta dello Sport.
“But, in the end, we accepted the club’s decision not to sell without any arguments. They have rejected all the offers and we never pushed for a transfer because he is happy in Rome.”
Kezman added that Lazio’s ambition to push for a Champions League spot, after missing out on the season’s competition thanks to a final-day loss to Inter Milan last season, convinced the Serbian midfielder to stay.
“President Claudio Lotito and sporting director Igli Tare explained that they want to aim for the Champions League and that Milinkovic is a key player to reach this goal. That is also his goal,” Kezman, the former Chelsea and PSG player, continued.
“He stayed because he wants to bring the Champions League to Lazio. And he is only 23, and under coach Simeone Inzaghi he is improving day by day – another year here will do him good.”