The Belgian teenager, who joined City back in 2013, has spent the season on loan at Celtic, forging an impressive partnership alongside Virgil van Dijk in the heart of the Bhoys defence.
With 40 appearances and six goals to his name for Celtic in all competitions this term, it's been a superb season for Denayer, and he has even earned his first cap for the Belgian national team this year.
Unsurprisingly, Celtic will be interested in keeping Denayer at the club for another year - but the Daily Mail believe City have other ideas.
They report that Denayer will return to City this summer before being loaned out once again, but this time to a Championship club in order to develop more before earning a place in the City squad for the start of the 2016/17 season.
Denayer has allegedly been told that he won't be returning to Celtic, with City blocking any move from the Bhoys as they want the 19-year-old to experience English football.
Having won the Young Player of the Year award for Celtic on Sunday, Denayer himself may be frustrated by the instructions laid out by City - and Celtic boss Ronny Deila will no doubt be fuming too, as he could also lose van Dijk this summer, leaving two huge gaps in his defence.
How much would Celtic miss Denayer?