The Daily Star reports that City are ready to let Hart leave, following a series of blunders.
City boss Manuel Pellegrini is keen to bring in Barcelona goalkeeper Victor Valdes at the end of the season.
Valdes’ current contract with Barcelona is set to expire at the end of the season and the 31-year-old is also wanted by Monaco.
City are now ready to rival Monaco for the highly-rated goalkeeper.
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Since Guus Hiddink arrived at the helm, Chelsea have improved considerably after a tricky start to the campaign.
Newcastle United are staring down the barrel of relegation to the Championship for the second time in the past eight years.