The Daily Mail says Arsenal's head of academy Per Mertesacker and technical director Edu are leading the shake-up and considering adding to their already expansive scouting network domestically and abroad.
Shields is hugely admired at Arsenal, with the north London club exploring the possibility of recruiting the respected talent spotter.
There is hope at the Emirates Stadium that Shields can be persuaded to leave City.
Shields has spent the last six-and-a-half years at the Etihad Stadium and is highly thought of at the Premier League champions, where he has held several positions. He has also worked as a scout at Crystal Palace and Fulham.