Reports in England and Italy have suggested the 24-year-old full-back is close to joining the big-spending Eastlands outfit.
But Lazio president Claudio Lotito is adamant there is currently no deal in place.
The Italian media claim the two clubs cannot agree on a transfer fee with Lazio having placed a 22.5million euro price tag on the player and City willing to offer a reported 18million euros.
Kolarov is under contract with the Serie A outfit until June 2011 but the Serbia international, who is currently on holiday, could leave the Rome side in the next 24 hours, according to Lazio coach Edy Reja.
Reja said: "His (Kolarov's) transfer will happen soon.
"We are closely monitoring what is happening."