The negotiations, which reportedly took place over a three month period, centred on a five-year contract offered to Mancini by Monaco owner Dmitry Rybolovlev, who was prepared to pay £6.4m-a-year - only Anzhi boss Guus Hiddink and Paris St Germain manager Carlo Ancelotti would have commanded higher salaries.
The Guardian reports the Manchester City boss was tempted by the offer, and came close to accepting, but eventually changed his mind after guiding City to their first Premier League title on the final day of the season.
Mancini then firmed up his commitment to City by signing a new five-year deal in July. The report quotes sources who claim secret discussions were held at the turn of the year, with a final meeting between the parties taking place in Rome just after City's title hopes looked to have been ended by a 1-0 defeat to Arsenal at the Emirates Stadium.
Monaco eventually appointed former-Chelsea boss Claudio Ranieri, and the Italian has guided the French giants to the top of Ligue 2.
The French club's owner, Rybolovlev, is extremely ambitious and wants to restore Monaco to their former glory after their relegation from Ligue 1 in 2011.
Mancini has won the FA Cup and the Premier League since taking over at the Etihad Stadium, although the league champions have struggled in the Champions League, and currently have a single point from their first three European matches this season.