The Spaniard is due to fall out of contract at the end of next season and there have been fears he could leave the Etihad Stadium after failing to agree fresh terms.
Talks have been going on since the start of the season and reports now suggest he is set to pen a new one-year extension that will net him in the region of £150,000 a week.
There has been talk of Italian giants AC Milan making a move, while Las Palmas want to take the former Valencia man back to La Liga, but that looks unlikely for now at least.
Silva has a clean sweep of domestic trophies since arriving at City from Valencia in 2010, but wants to win the Champions League before he leaves and is keen to sign on once again.
City are also eager to keep hold and the deal should be announced shortly.