According to Sam Lee of Goal, the 20-year-old has caught the eye at the Etihad Stadium after a brilliant campaign in the Bundesliga and City boss Pep Guardiola is keen on adding another forward to his squad at the end of the campaign.
The article also noted that while City hold an interest in Paris Saint-Germain striker Kylian Mbappe, there would only be a slim chance of getting him to the club in the upcoming transfer window.
"It can now be revealed that Bailey is one of two names on City’s 'non-Mbappe' list," Lee wrote. "...City have been keeping tabs on the Jamaican for some time and included him on a four-man list of targets in January. They have maintained their interest since then and while other players have fallen out of contention, Bailey is still regarded as a viable option."
Lee also reported City reserve goalkeeper Claudio Bravo may move to Leverkusen as part of any deal, although the Premier League champions have not "made any concrete moves to open negotiations and they are still believed to be in a position whereby another club could make a rival move (for Bailey)."
Bailey has been one of the standout performers in the Bundesliga this season, dazzling on the left flank for Leverkusen.
As we can see below, Scouted Football compared the youngster to City sensation Leroy Sane earlier in the season:
Scouted Football @ScoutedFtbl
We've compared his pace to Leroy Sané before - a comparison which grows with every performance. Bailey's very difficult to defend effectively. Pinpoints space and sears into it; few defenders can handle it. Propensity for low percentage (long) shots potentially an issue. 🔥 https://t.co/TOTNoJmNs7
Given he's left-sided, versatile and searingly quick, that is not a shock. The Leverkusen tyro is further behind in his development, although it's clear he has the potential to be a special footballer.
This season in the Bundesliga he's given so many opponents a tough afternoon with his strong running and raw speed. Additionally, Bailey has shown great composure in the final third, chipping in with nine goals and six assists in the top flight.
Interest from some of Europe's biggest clubs is not surprising. While there are still raw aspects to Bailey's game, the right coach could help his progress into a world-class talent.
Bleacher Report's Dean Jones broke down the interest in him in February:
Some may view this potential signing as an indulgence on the part of City. After all, they've been pretty prolific this term, as noted by Sky Sports Statto:
Still, Guardiola's side have been at their best with speed on either side in Sane and Raheem Sterling. Should one of those players miss out, there's not another like-for-like option, with Bernardo Silva a player who prefers to drift infield from the touchline.
Bailey wouldn't necessarily be a guaranteed starter if he were to move, but he would give City another scintillating threat in the final third. For any attacking player, linking up with Guardiola and playing in this City side would be a tempting prospect.