The Brazilian is a hot property this winter after a poor start to life in Serie A.
The 26-year-old only moved to Juve in the summer from Aston Villa for big money.
But he has managed nine Serie A appearances in the first half of the season, leading to Juve being willing to cash in on him.
Italian outlet Gazzetta dello Sport state that Juve are ready to move on from Luiz, with City primed to make a move.
"He’s playing less than we all expected, but we’re talking about a strong player," Villa sporting director Monchi said about Luiz to Gazzetta recently.
"There are guys who arrive and impose themselves, others who need time. Patience is needed, but Douglas’ qualities are beyond discussion. He will become important for Juve.
“He’s a playmaker and every ball that comes out of his feet has a meaning: last year he played 90% of the games with us. He was decisive."