Sky Sports News understands that reports of an impasse in discussions are inaccurate and that City’s director of football, Txiki Begiristain will hold talks with Sterling’s representatives before the end of September.
Sterling is out of contract in June 2020 and City have no option to extend his stay at the Etihad for another 12 months.
On Friday, City manager Pep Guardiola told reporters: “It’s well known we’re delighted with him and would like him to continue. My club knows my opinion and we share that. After that it is the club and the agent.”
Sterling signed for the current Premier League champions in 2015 from Liverpool and has since made 144 appearances in all competitions, scoring 47 goals.
He was also a key member of Gareth Southgate’s England squad who made it to the World Cup semi-final in Russia this summer.
Sterling has three Premier League goals so far this season.