The Daily Star Sunday says PSG are ready to offer £40million for Balotelli in January.
Meanwhile, AC Milan are proposing a loan until the end of the season, with a view to a permanent deal.
And Balotelli's former club - Inter Milan - are also eyeing the situation.
A return to Italy is the preferred destination for the City ace as his on-off girlfriend Raffaella Fico is expecting his child.
He is buying a £1m apartment in Brescia - an hour from Milan.