City have already had bids in the region of £20million for the 24-year-old England international rejected by Villa this summer but O'Neill has now declared that Milner wants to leave Villa Park and that he would be made available at the right price.
O'Neill told a press conference ahead of Villa's friendly with Bohemians in Dublin on Saturday: "I had a conversation with James before the World Cup and he intimated that he'd like to go.
"City made an offer but it did not meet our valuation. I'm sure matters will be resolved soon. James is back next week having had an extended holiday."