The Premier League title contenders have already agreed a deal for 20-year-old Argentine midfielder Bruno Zuculini from Racing Club, but will also enter the market for a player with more experience.
Garcia has failed to establish himself at Eastlands since being signed by Roberto Mancini in the summer of 2012.
His possible departure was discussed in January as City considered making a late move for Porto duo Eliaquim Mangala and Fernando.
Fernando was considered likely to join City as a free agent in the summer, but has since agreed a new contract at Porto.
He remains an option for the summer, but City have also begun to identify alternatives.
Paris St Germain’s Blaise Matuidi and Victor Wanyama of Southampton are among the names being studied.
27-year-old Garcia joined City in a £15.8million deal from Benfica in the summer of 2012.
He scored on his debut at Stoke, but has since struggled to establish himself amongst a host of midfield stars, and was linked with a loan move to Napoli in January.
Rafael Benitez may well reignite his interest in the Spanish midfielder in the summer if the price is right.