The report claims Roberto Mancini and director of football Txiki Begiristain have drawn up a shortlist of targets, with a view to strengthening the team for next season.
The City hierarchy have recognised the need for reinforcements following a disappointing Premier League and Champions League campaign so far, and could be ready to go back in for the £52m-rated Cavani.
Talks between City and Napoli stalled last month over a refusal to meet the striker's £52m minimum fee release clause, but the report claims City have renewed their interest following a realisation within the club that Radamel Falcao is likely to sign for Chelsea.
As a result, the defending Premier League champions look set to move onto other striker targets and Cavani, who's bagged 18 Serie 'A' goals this season, is now the number one priority.
Real Madrid and Paris St Germain are likely to rival City for the signature of the Uruguayan international. But Mancini is thought to be desperate to avoid a repeat of last summer - when City were beaten to the signing of Robin Van Persie by Manchester United.
And the club are reportedly even prepared to offload £25m-rated Edin Dzeko to facilitate their move for Cavani.
The Bosnian international has played a bit-part role this season, despite a number of important goalscoring contributions from the bench.
Mancini let Mario Balotelli leave the club in the January transfer window, and he voiced his concerns earlier this season at his striker's inability to convert chances into goals.
Dzeko leads the club's goalscoring chart with 12 so far this campaign, while Sergio Aguero has 11 and Carlos Tevez nine.
In comparison, Manchester United forward Robin Van Persie has 23 goals - he leads the Premier League with 19 - while Javier Hernandez has 14 and Wayne Rooney has 13 strikes.