Negotiations between City and Milan have been ongoing for several weeks, with the main sticking point being the Italian side's desire to take the player on-loan as opposed to the Premier League outfit's determination to sell him.
Milan would like to agree a loan move with the right to make the arrangement permanent next summer, while City want a deal in place to ensure the move becomes permanent at the end of any loan.
Reports in Italy have claimed Milan's city rivals Inter could make a late move for Tevez, but Milan vice-president Adriano Galliani insists the deal to sign the forward is still very much alive.
"The negotiations are very much alive," said Galliani. "Manchester insist on a loan with an obligation to buy and we insist on a loan with the right to buy."
AC Milan coach Massimiliano Allegri refused to be drawn on the club's pursuit of Tevez claiming the move is not a priority.
"I don't know," said Allegri. "It's still too early to say, but Milan already has other stronger strikers and so we are not looking at the moment."