The centre-half has been out of favour at City since the return to fitness of key defenders and boss Roberto Mancini is now keen for Boyata to go out and get some experience, but only if he is guarenteed to play.
The 20 year-old has only featured in two Premier League games this season, with the majority of his appearances coming in the Europa League group stages.
Wigan are also reportedly interested but apparently Wolves have beaten off the competition from the north-west club.
City signed Boyata from Brussels in 2006 and has since progressed through their youth academy.
The People also claims that Mick McCarthy is back in the race for Hearts and Scotland left back Lee Wallace following his horrific knee injury.