At a confusing press conference, manager Manuel Pellegrini claimed the former England midfielder could play in the clash at the Etihad Stadium but admitted a deal had not yet been completed.
It therefore seems Pellegrini is working on the assumption Lampard will be available for the champions' first Barclays Premier League game of 2015.
Lampard, 36, has effectively been on loan at City for the first part of the season from sister club New York City, but that arrangement is due to end on New Year's Eve.
Pellegrini and the player are keen to extend the deal, and it has long seemed an inevitability, but as yet there has been no confirmation from either club.
Asked about the situation at his pre-match press conference, Pellegrini said: "He is in the squad list for tomorrow
He can play tomorrow."
But when asked whether that meant a new deal had been concluded, Pellegrini suggested nothing had been finalised.
He said: "I said during December we will know what happens with the future of Frank Lampard
It is important for him to stay with us
Today we finish December
I hope today we will have news."
The matter has been further confused by reports that City might not be able to re-register Lampard with the Premier League until the January transfer window opens on Saturday.
That, however, is not an issue for the Sunderland game as the Premier League has confirmed that Lampard's registration for the first part of the season actually runs until the next window opens
The issue therefore is between the two clubs
Lampard signed for New York City in the summer, but was not actually due to start work with the club until January
He was then able to join City on a short-term deal until that time, an arrangement that has effectively been a loan.
City now want to loan the player for longer from their American counterparts.
It remains to be seen how long a deal can be reached, but Pellegrini remains keen to keep the player for the rest of season.
He said: "When all the things about Frank are clear we can talk more about that - but of course I want him to stay until the end of the season."
Source : PA
Source: PA