Man City boss Eriksson confident Dunne will ink deal
The stopper has been at the club since signing from Everton in 2000 and he has made over 250 appearances for City.
Earlier this month Eriksson ensured that Micah Richards would remain at the club until 2013 after offering the defender an improved deal.
"I know that talks are ongoing but I don't know at what stage," said the coach.
"He's the most experienced player that we have of course. He is like a father if not big brother to a very young new squad.
"He has always been good and so have his performances."