Aguero has confirmed that he intends to leave the capital club this summer, sparking a scramble for his signature.
Eastlands boss Roberto Mancini confirmed earlier in the week that he expected a bid to be lodged for the hugely-talented 23-year-old in the coming days.
And while the Premier League club are yet to table a formal offer, they are due to begin negotiations with their Spanish counterparts, according to Sky Sports News.
Mancini is eager to complete a swoop for the gifted forward regardless of the outcome of the Carlos Tevez transfer saga this summer.
Aguero has previously admitted that he would be open to the possibility of a move to the Premier League should he elect to leave Spain, where Real Madrid are known to be keen.
Meanwhile, Sky Sports sources have learned that Tevez's proposed ?40million move to Corinthians collapsed when the Brazilian club failed to provide City with a banker's guarantee.
Mancini's side had accepted all the terms of the offer from the South American side, but pulled the plug on the deal prior to the transfer window closing in Brazil at 4am on Thursday morning (UK time) as they were unable to provide proof of funds.
Source: Team Talk
Source: Team Talk