Pellegrini is set to remain with the Manchester club until the summer, although reports are indicating that he will be shown the door should he fail to reach the knockout stages of the Champions League.
With qualification looking increasingly unlikely in Europe’s premier competition, and domestic success also appearing to be off the cards - with City currently six points off Premier League leaders Chelsea - club officials have already started searching for potential replacements, with former Barcelona, and current Bayern Munich head coach Pep Guardiola said to be on their radar.
However, the Standard is reporting that the club have a strong desire to see Atletico Madrid boss Diego Simeone at the Etihad next season, with an insider confirming their interest should Pellegrini’s season end in failure.
He said: “City have not decided it’s the end for Pellegrini and he still has time to pull the season round.
“But if that doesn’t happen, then failure will not be tolerated.
“Simeone has produced wonders at Atletico, on a very limited budget — any top club would want him.”
The Argentine coach is currently one of the most in-demand managerial prospects in world football, having won the Europa League, Super Cup, Copa del Rey and La Liga whilst with the Spanish club. He came within seconds of leading Atletico to the Champions League title last season, and his success on a small budget - making his team greater than their individual strengths - has drawn comparisons with the rise to prominence of now-Chelsea boss Jose Mourinho.
However, City may be forced to look elsewhere if Pellegrini leaves in the summer, with sources reporting that Simeone is adamant about staying with the club until his contract expires in 2016, although a move to the Premier League after that date is said to be exciting the 44-year-old.