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Published 10:27 4 Jun 2015 BST
Updated 10:56 4 Jun 2015 BST
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Following the departure of Steven Gerrard, to LA Galaxy, the club are seeking a box-to-box midfielder and a new captain. Milner, many at the club believe, ticks both of those boxes.
Capped 53 times by England, Milner won two Premier League titles, an FA Cup and a League Cup during his five-year stint with City.
He started his professional career as a 16-year-old, with Leeds United, before moving on to Newcastle United then Aston Villa. In 24 appearances against Liverpool, Milner has been on the losing side 13 times.
The other candidates are Jordan Henderson, who was seen as the heir apparent to Gerrard, and defender Martin Skrtel.
Former Reds defender Jamie Carragher believes the captaincy carrot was dangled in front of Milner. Indeed, City were reported to have offered Milner a contract of £160,000 so the added fillip of leading the Reds out at Anfield may have swayed his decision.
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