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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Liverpool have unveiled their new home kit for next season, sticking with the hugely popular retro styling of the current shirt.
The reputation of the Premier League means it is the most popular and one of the most watched leagues in the world.