The Belgian ace was sold by the Blues just over 12 months ago after failing to make the grade at Stamford Bridge, but has since flourished in the Bundesliga with Wolfsburg.
Eight goals and 12 assists have helped to keep De Bruyne’s new side flying high in the German top flight, and such form has alerted City.
The Sky Blues are thought to be watching the 23-year-old closely, with scouts believed to be paying close attention to every Wolfsburg game.
However, the Volkswagen-backed side are in a strong financial position and want at least £40m – a massive hike on the £17m paid – for their man.
De Bruyne in an international colleague of City skipper Vincent Kompany.