City are keeping an eye on Arteta, 28, as an alternative option. The former Spain Under 21 international, like Milner, can play in central midfield or out wide.
Villa held talks shortly before the tournament to try to get him to extend his deal, but he left for South Africa without pledging his future to the club, and went on holiday immediately after England's exit.
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Having secured the signatures of Jerome Boateng, David Silva and Yaya Toure, Mancini is well on with his summer rebuilding programme.
City could turn to Arteta
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And with Nedum Onuoha attracting interest from David Moyes after falling down City's pecking order under Air Max Nike Women Wear Mancini, he could be part of the deal.
Blues boss Roberto Mancini is optimistic a deal to bring in England midfielder Milner, 24, can be completed within 48 hours. But Villa's 30m price tag is far higher than City's valuation.
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Harry Redknapp is weighing up a bid to take Micah Richards to Spurs. Stephen Ireland's future also remains up in the air. The midfielder City's Air Max 95 Navy
Who would you prefer at City Milner or Arteta? Have your say.
He fought his way back from a long term knee injury to become a key figure in Everton's impressive run over the second half of last season.
And that has alerted several clubs to players who face being left on the fringes at Eastlands.
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Milner, who has two years to run on his Villa contract, indicated before the World Cup he was flattered by the Blues' interest in him.
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