Pep Guardiola has dramatically switched his search for an extra attacker to the gifted flanker after pulling out of the Alexis Sanchez deal.
Despite topping the Prem table, City want something more in attack with Leroy Sane injured for six or seven weeks and the Champions League to be challenged for.
Money is no object in the Mahrez move but they will face opposition from the Foxes hierarchy who have turned down advances in the past and have the cash to do so again.
Mahrez went missing from Leicester in a bid to push through a transfer to Chelsea in the summer window but the tactic did not work.
City want to play it straight and agree a fee, knowing that wages will not be an issue.
They had fortunes set aside for Sanchez but were unwilling to break their own wage structure to bring in the Chilean.
The potential move would see the Etihad outfit smash their transfer record for the second time in two days after splashing £57m on Atletico Bilbao’s Aymeric Laporte.