The Daily Star Sunday says Milner, 28, will have 12 months left on his contract in the summer.
Utility man Milner is keen to hear what Etihad boss Manuel Pellegrini has to say.
The England man is happy to remain a squad player but only if he continues to get a decent amount of games.
City are likely to offer Milner a three-year deal up to 2017.
But the club are only prepared to match his current £80,000-a-week wages.
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