The Sky Blues failed with a deadline day double swoop for the Brazilian midfielder and his team-mate Eliaquim Mangala after being priced out of a deal by the Portuguese champions.
Porto wanted a combined £48m for the duo, with Fernando set to cost £12m of that.
City were unwilling to meet such sums, with the anchor man’s contract set to expire at the end of the season.
As a result of the actions of last month, the South American is believed to be edging towards a summer move away from the club.
Reports suggest that Porto will allow him to move on, with a new contract agreement between the two parties unlikely to be achievable.
City may return for Fernando in the summer, however it remains unclear as to whether or not Manuel Pellegrini will switch targets later this year.
Manchester United were also linked with the 26-year-old, as were fellow Premier League sides Liverpool and Chelsea.