Well inside the final year of his current deal, Iniesta rubbished Barca president Josep Maria Bartomeu's claims of talks over a new deal had commenced.
Instead, Iniesta remains in limbo and is now four months away from being permitted to commit to a pre-contract with a foreign club.
City execs Ferran Soriano and Txiki Begiristain are drawing up a lucrative offer for Iniesta, which would also include playing opportunities later in his career with their sister clubs New York City FC and Melbourne City.
Iniesta, after his time with City, would follow the path of former Barca teammate David Villa, who played for Melbourne before moving onto NYCFC.
The Barca captain's priority is to stay at the Nou Camp, but he has spoken openly in recent weeks of feeling let down by the board and Bartomeu.