The Mirror says City have spent the last 12 months trying to persuade Sane to sign a new long-term deal.
And Bayern Munich used the stand-off to launch a summer-long attempt to unsettle the 23-year-old German international.
Those talks are now likely to be put on hold as the winger begins his seven-month recovery from an operation to repair a damaged cruciate ligament that will take place this week.
Sane suffered the injury in the early moments of City's Community Shield victory over Liverpool last Sunday.
He will be operated on by renowned Barcelona-based specialist Dr Ramon Cugat this week.
And Pep Guardiola admitted that the player will be sidelined at least until March.