Manchester United and Chelsea have also been linked with the defender who could be available for £20million
Miranda, 30, has been a target for Manchester United, Chelsea and Barcelona but City are watching developments after being sounded out.
City have already been heavily linked with Atletico striker Mario Mandzukic and it appears that the Spanish club would sell Miranda for around £20m.
City's big money defensive signing Eliaquim Mangala is taking time to settle in English football while Matija Nastasic could be sold in January.
Atletico had strong interest last summer and United have been heavily linked with a summer move for the Brazilian international.
But City have now been sounded out and Miranda is keen on a move to England if he can get a four-year deal in the Premier League.
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