A report in Spain claimed the Real Madrid boss had agreed to take over from Roberto Mancini at Eastlands this summer.
But the Portuguese, who is under contract at the Bernabeu until 2014, firmly insisted at a press conference ahead of his side's La Liga match with Osasuna that was not the case.
"I deny that I or anyone on my behalf has reached an agreement with City," the former Chelsea boss said.
"I have a contract and do not have to answer questions that have no foundation."
Mourinho has consistently been linked with a move back to the Premier League, even though his side have a healthy lead at the top of La Liga and are on the brink of a place in the semi-finals of the Champions League.
He has courted controversy during his time in Spain, though, and has often had a difficult relationship with the press.
Neither Mourinho, nor any of his coaching staff or players spoke to journalists after their recent 1-1 draw with Villarreal in which the manager was sent to the stands and Madrid had both Sergio Ramos and Mesut Ozil sent off.
But the Portuguese defended the decision, claiming the club were simply trying to keep their unhappiness to themselves after previously being criticised for voicing their complaints.
"Last season, after the Champions League semi-finals, we said what we thought with open hearts and you lot (the media) killed us," he said.
"You criticised us again after we criticised the referee when we were eliminated from the Copa del Rey this year.
"We wanted to avoid controversy and suspensions after facing Villarreal and that is why we didn't make any comments.
"We thought we were doing what was best, but we've been criticised again. We don't have any problems, you cause them and have to decide which of the two attitudes is better.
"You cannot accuse us of looking for controversy this time because we kept quiet. I don't know if you're fixated on me or on Real Madrid, but we're always criticised. We nevertheless believe we did the right thing and neither I nor my players said anything against the referee."
Mourinho also denied he had a rift with goalkeeper Iker Casillas amid reports their relationship had broken down.
"What people say about my relationship with Casillas is not true," he said. "I have no problems with him nor with the rest of my players."