Guehi's contract with Crystal Palace is due to expire in the summer, and he has attracted interest from several top European clubs, including Barcelona, Real Madrid, and Arsenal.
Crystal Palace previously valued the England international at around £35m and resisted his departure in August, despite interest from Liverpool.
City are prepared to match other offers to secure the 25-year-old centre-half now, with Guehi reportedly open to the move.
A potential £35m deal for Guehi would significantly add to City's net spend, following their recent £65m acquisition of Antoine Semenyo.