The Sentinel says German sources state the club have tabled a bid for the 34 year-old Croatian.
City boss Mark Hughes denied making an approach for Olic when asked before Christmas.
But Wolfsburg chief Klaus Allofs said: "That was totally odd.
"There is not a single reason to let go of our top scorer."
For breaking stories and all the great banter like us on Facebook: facebook.com/tribalfootball