The Mirror reports that City will give the 21-year-old a new long-term deal and a chance to play in the Premier League.
The England under-20 defender has impressed while on loan at Championship side Doncaster and City believe Wabara can become a regular in their first team.
City are expected to recall Wabara in January.
Wabara’s current contract with City is due to expire at the end of the season.
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Summer 2016 is set to be a very exciting time for football fans, as this is when the long awaited Euro 2016 tournament kicks off.
Since Guus Hiddink arrived at the helm, Chelsea have improved considerably after a tricky start to the campaign.