Villa, who sold Barry to City in 2009, were offered the chance to re-sign the veteran midfielder, but Paul Lambert has shunned the 32-year-old England international.
Despite playing a prominent role in the Citizens Premier League title-winning season, Barry does not appear to feature in the plans of new boss Manuel Pellegrini.
The Chilean tactician has been busy in the summer transfer window, bringing in the likes of Jesus Navas, Fernandinho and Steven Jovetic, pushing the likes of Barry even further down the pecking order.
Sources close to Manchester City suggest the Etihad outfit contacted the midlands club to see whether they'd be interested in signing Barry on a season-long loan.
But Lambert's transfer policy of only signing up-and-coming players aged 24 or under put an end to any move before negotiations could even begin, and Barry is left wondering whether he will get any first-team football this season.