The Portuguese wanted to leave City in the summer for Barcelona, but is enjoying a renaissance at City this term.
Despite rumours of Bernardo signing a new contract, Calciomercato claims that the midfielder is dreaming of moving to Real Madrid.
Bernardo is unhappy in England, and would prefer to play his football in Spain.
However, there is still a chance that City's push for him to sign a new deal may result in him committing his long-term future to the Etihad Stadium club.
The 27-year-old recently starred for City in their Champions League last-16 clash with Sporting Lisbon, scoring two goals in the 5-0 victory.