The 25-year-old has been linked with a move away from Eastlands for several weeks, with former club Aston Villa believed to be interested in taking the England international back to Villa Park.
But according to Caughtoffside.com, Liverpool boss Kenny Dalglish is monitoring Milner's availability and could look to lure him to Merseyside.
Milner moved to City last August in a £26million deal and made a bright start to the 2010/11 campaign, before finding himself warming the bench more often in the second half of the season.
With the likes of Udinese winger Alexis Sanchez and Arsenal's Samir Nasri recently linked with moves to City, there is a growing feeling that Milner could be offloaded by manager Roberto Mancini before the start of next season.
And Liverpool are in a position to finance a move for the former Newcastle player, who would reportedly cost around £20m.
Dalglish has already splashed out £20m on Jordan Henderson this summer, while Blackpool captain Charlie Adam and Aston Villa winger Stewart Downing are still targets for the Scot.
But should a move for either player fail to go through - and in Downing's case it appears the Merseysiders are unwilling to meet Villa's £20m valuation - then a move for Milner may well become a possibility.
Source: crunchsports.com
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