According to Sky Sports News, Sterling and City representatives are a long way apart on wage expectations. The England international has two years left on a contract worth £175,000 per week.
The Premier League champions were reportedly hopeful of announcing the extension before the 2018 FIFA World Cup beings on Thursday, although now negotiations are likely to be put back until after the tournament.
Despite the setback, it's said the club are "relaxed" about the situation and "believe a deal will be reached on his return" from the summer showpiece. In March, manager Pep Guardiola was asked about an extension for the forward:
City have tied down a number of key players to new contracts as of late, with Kevin De Bruyne the team's top earner with a weekly salary of £350,000.
With just two years remaining on his Etihad Stadium deal, City will want to secure Sterling's future as quickly as possible after the World Cup. Under the expert guidance of Guardiola last season he blossomed into one of the team's most important players.
There was actually speculation about the former Liverpool man leaving City ahead of 2017-18—the Daily Mirror's John Cross reported in August that Arsenal were offered Sterling as part of a swap deal for Alexis Sanchez—but the 23-year-old stayed in Manchester and flourished.
Scouted Football summed up just how crucial Sterling was to the City cause in the final third:
Also interesting is that there are areas in which he can still make major strides.
Despite netting 23 times last term, the winger still had moments of profligacy, panicking when presented with clear chances. If he can become more cold-blooded in front of goal, the Premier League champions will have one of the division's best on their books.
As noted by Sky Sports' Monday Night Football, he compares well to some Premier League icons at his age:
You can't imagine Sterling would want to be playing his football anywhere else as things stand. Not only is he improving as a player and winning things at City, the Guardiola's attacking football appears great fun to be part of.
City supporters may be a little concerned by the latest development in the contract negotiations. Nevertheless, they can surely sit back and watch their man at the World Cup for the next month knowing he'll be a crucial part of the plan at the Etihad Stadium for years to come.