The youngster is set to miss at least the next six weeks, and the Premier League side are keen to bolster their defence.
City have named the 30-year-old as their prime target for this transfer window, however the Santiago Bernabeu team are not willing to sell.
Following Raul Albiol’s move to Napoli, Madrid have only three senior central defenders on their books, and do not want to lose one this late in the window.
Carlo Ancelotti’s men may consider offers over €30m (£25.6m) though, the paper insists.
Atletico Madrid could make a move for Fiorentina playmaker Adem Ljajic, but must first off-load Adrian.
The Spain international has been heavily linked with a move away from Vicente Calderon this summer, with Valencia and several Premier League clubs believed to be interested.
And with 25-year-old looking increasingly likely to leave, the capital side will hope to fill the gap in their squad with the Viola youngster, according to AS.
The Serbia international scored 11 goals in 28 League games last term.