The Daily Express says Manuel Pellegrini identified the £15m-rated midfielder as one of his main transfer targets in January but City were unable to complete a deal in time.
Director of football Txiki Begiristain and chief executive Ferran Soriano had been tied up with negotiations over Spain striker David Villa’s move to City’s American franchise, New York City FC.
But with Villa’s switch now sealed, the pair are free to thrash out a deal to bring Fernando to the Etihad.
The 26-year-old is contracted until 2017 but City remain confident the Portuguese club will sell him.
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