Reports in Italy suggest City have made contact with the San Siro outfit over the potential chance of exchanging Balotelli for Brazilian Pato.
Balotelli has been criticised by City boss Roberto Mancini in the past and he has been at the centre of plenty of controversy since joining the club from Milan's city rivals, Inter, in 2011.
The striker has been sent off three times in his City career and towards the end of last season Mancini admitted he was running out of patience with the Italy international.
However, he has stayed at the Etihad but his future remains unclear amid reports he wants to return to Italy.
The rumours of a potential swap involving Pato were fuelled when his agent Gilmar Veloz said: "We want to understand and properly evaluate the situation with Milan. I'll talk to Alexandre and the club then we shall see what to do."