HITC Sport understands that fresh talks are planned after two failed bids from the Etihad Stadium for the England international.
Sterling has just returned to pre-season training with the Reds after two days off with illness, which came after he told the club he did not want to go on their pre-season tour – as covered by the Guardian.
Manchester City have had two bids rejected by Liverpool, as reported in the Daily Mail, as the Merseyside giants hope to get their full valuation of £50million for the 20-year-old England international.
Now HITC Sport has been told by sources close to the deal that City are set to reopen dialogue with Premier League rivals Liverpool on Friday.
Sterling is desperate to seal a move away from Anfield, having decided that his long-term future lies away from Merseyside, and will be hoping that a deal can be agreed before Liverpool depart on Sunday for their tour of Australia and the Far East.