City's former transfer record holder fell out of favour under Pep Guardiola last season and spent the 2025/26 campaign on loan at Everton.
He missed the final weeks of the season due to a foot injury, but he's since returned to Manchester, and was involved in City's preseason sessions.
New City boss Enzo Maresca had confirmed his plan to speak with Grealish in the coming weeks but admitted his future a the club was unclear.
However, a decision now looks to have been made, with Greliash not named among City's travelling squad for their preseason tour of Asia, as he heads into the finial year of his contract.
A move back to former club Aston Villa does not look likely at this stage, following their call to bring in Alejandro Garnacho on loan, and Everton could now offer Grealiish a fresh start if City agree.
Due to Grealish's rumoured £300,000-a-week wages, Everton will either seek a loan with City contributing heavily to his salary, or a possible free transfer if the England international can agree an exit package with City.