Goal.com understands that Roberto Mancini wants to re-sign the City old boy and there is growing confidence at Etihad Stadium that a deal can be wrapped up quickly.
Sturridge has just a year remaining on his Chelsea contract and is considering his future after falling out of favour in the final months of the season and missing out on England's Euro 2012 squad.
City have emerged as the favourites for the signature of the 22-year-old, who retains close links to Manchester and was pictured on holiday this week with Micah Richards in the Caribbean.
Uncertainty over his future comes at a time when Chelsea are overhauling their attacking options. The Londoners are hopeful of adding Hulk to new signings Eden Hazard and Marko Marin, while Kevin De Bruyne will also move permanently to Stamford Bridge ahead of the new campaign.
Chelsea will demand around £12m for Sturridge, who was put on stand-by for the England squad following a season that yielded 13 goals for his club and in which he made both of his two international appearances for the senior team.
However, City negotiated a 15 per cent sell-on clause when they sold their former academy star to Stamford Bridge in 2009 and are hopeful a deal can be agreed for little over £10m.
Sources have told Goal.com that the 22-year-old’s £65,000 a week Chelsea wages are not considered to be a problem by City.
Mancini is a big admirer of Sturridge and has spoken in the past of his disappointment that the forward was sold to Chelsea shortly before he took over as manager.
Sturridge's frustration is twofold. He is unhappy at being played on the flanks at Chelsea rather than in his favourite centre-forward position and at his England exclusion after losing his regular club spot in the final months of the season. After his form deteriorated, he was an unused substitute in both the Champions League and FA Cup finals.
Speaking to the Jamaica Observer last Sunday, Sturridge said: "I feel hurt, but you know, maybe it is a blessing in disguise. It's going to spur me on to do better. It's going to drive me to want more success and to be a better footballer. I'm upset about it, but not too much.
"Winning the Champions league is the greatest achievement for any club, and I am just happy I was a part of a Chelsea team that created history in doing that. Having that medal is the highlight of my career."