The Sun says they are willing to let Hart leave the club for a 'considerate' transfer fee – as a thank you for his years of service.
Hart has three-years left on his £120,000-a-week contract and is owed £17.8m – around half of which City are willing to pay.
An Etihad insider said: “City would be willing to pay him off around half that figure and also be 'considerate' towards his selling price.
“They are also willing to bankroll half his present wages for 12 months and revisit the severance situation next summer.
“Both parties are operating on surprisingly cordial terms."