According to the Mirror's David Anderson, Sterling put the negotiations on ice ahead of the 2018 FIFA World Cup, hoping a good showing there would increase his leverage. That plan has backfired, however, and City are now considering a sale next summer with his current deal set to run out in 2020.
The club will reportedly wait for the former Liverpool man to initiate negotiations, with Sterling now on holiday to recover from his appearances for England in Russia.
Per the report, City's position is not to let any of their top stars run down their contract, so the news he will be sold next summer if they can't agree to a new deal isn't a surprise.
The England international is reported to currently take home £170,000 per week, and he's looking for better terms.
The World Cup highlighted both the limitations and strengths of Sterling as a player. He did tons of damage for the Three Lions with his movement, creating space for team-mates, but he also struggled to finish his own chances, including several sitters.
He was excellent for the Sky Blues in the 2017-18 campaign, but as pointed out by BBC 5 Live Sport, the Premier League champions have plenty of other options:
He did bag 23 goals for City last season, so his scoring struggles appear limited to the national team.
These negotiations will likely resume once Sterling returns from vacation, with his start to the new Premier League season decisive. If he can recapture the form he showed during the 2017-18 campaign, there's little doubt City will do what they can to keep him around.