Berlin - Manchester City have offered 35 million euros for Wolfsburg's Bosnian striker Edin Dzeko, Germany's Bild daily reported on Wednesday.
In what Bild said would be a record price for a Bundesliga player, the English club would pay the Germans 30 million euros for the 24-year-old plus five million euros more if City reach the Champions League.
The transfer could be finalised in time for City's crunch away clash at Arsenal on January 5, Bild added, without identifying a source.
The paper cited Wolfsburg's general manager Dieter Hoeness as declining to comment on what he called "speculation".
Wolfsburg are currently 13th in the table, having gone seven Bundesliga games without a win, putting their coach - former England manager Steve McClaren - under severe pressure.
Roberto Mancini's City, by contrast, are riding high, level on points with Manchester United at the top of the Premiership, although they are behind on goal difference and Sir Alex Ferguson's side have two games in hand.
Earlier this month, Dzeko, who is Wolfsburg's captain, refused to shake McClaren's hand when he was substituted after missing a crucial penalty in the 77th minute of a goalless draw with Werder Bremen.
Other top-rank European clubs have also been linked with the striker, including Italian giants AC Milan and Juventus as well as under-performing Bundesliga heavyweights Bayern Munich.