The Brazilian centre-back has been one of the Rojiblancos’ star turns over the course of the past few seasons, helping the take the Copa del Rey and La Liga titles to the Vicente Calderon.
His performances for Atleti have not gone unnoticed, with United having been keen on him for some time.
Louis van Gaal is rumoured to be ready to revisit a deal for Miranda in January after opting against pressing the move over the summer, but City are also in the battle.
Manuel Pellegrini is yet to be convinced by big money arrival Eliaquim Mangala, and sees the 30-year-old Atletico ace as an ideal partner for Vincent Kompany at the heart of his backline.
Although a key man in Madrid, Miranda is believed to be available for around £20m, which is well within the Sky Blues rumoured winter budget after a frugal summer.