Sky Sports News understands two "big" offers are expected to be made for Rice on Thursday, one of them from the Premier League champions.

Sky in Italy are reporting City are prepared to pay £75m + £15m in bonuses payable across two years for Rice.

• Man City rumours | Arsenal transfer rumours
• Transfer Centre LIVE! | Papers - latest headlines
• Get Sky Sports | Download the Sky Sports App

City are preparing for life without treble-winning captain Ilkay Gundogan, who is on the verge of joining Barcelona, and want England international Rice despite already agreeing a deal with Chelsea for Mateo Kovacic.

Having beaten Arsenal to last season's Premier League title, Manchester City are now hoping to pip the Gunners to Rice's signature.

Arsenal are preparing to make a third bid for Rice after seeing their opening two offers rejected.

It's understood positive negotiations are continuing between the London clubs, who are said to be working on both the fee and payment structure of the deal.

Manchester United have an interest in Rice and there have been discussions internally about how possible it would be to sanction a deal.

Due to Financial Fair Play rules, it's unlikely United could spend a huge portion of their budget on one player - especially as they have other areas they want to strengthen.

West Ham have agreed to let Rice go this summer but want a deal worth £120m if they are to sanction their captain's departure.

City's interest increases the likelihood of a bidding war between themselves and Arsenal, and the possibility of West Ham's asking price being matched.

Analysis: Rice alongside Rodri would give Man City even more midfield control

Sky Sports' Peter Smith:

Rodri started 52 games for Manchester City last season, capping a brilliant campaign for both himself and his team with the Champions League match-winning goal. He's only just turned 26 years old and the Premier League's top defensive midfielder and Pep Guardiola favourite is set to be a mainstay of the Man City team for seasons to come.

So why are the treble-winners so eager to bring in West Ham's Declan Rice? The answer is that rather than being an alternative, back-up or replacement for Rodri, Rice has the attributes to be an ideal foil for the Spaniard. Kalvin Phillips has struggled badly for game time since joining Man City but his England team-mate appears to have a ready-made role in Guardiola's XI.

During the past season, we saw Rico Lewis, Kyle Walker and most recently John Stones step into midfield from out-of-possession defensive positions to play beside Rodri. It was a tactical ploy by Guardiola which paid off handsomely, giving Man City an extra man in that key area of the pitch. Its success was reflected by the fact teams throughout the league were trying to replicate it by the end of the season.

Rice - top for recoveries, interceptions and distance carrying the ball in the Premier League last season - could take on the role with authority. He would be a first-class defensive midfield partner for Rodri, able to break up play but also deliver from deep on the ball. There is then Rice's history as a centre-back and the flexibility he could offer Guardiola by dropping into the backline.

It would be an exciting switch for Rice and Man City - and an ominous one for their rivals. With Mateo Kovacic a £30m replacement for the outgoing captain Ilkay Gundogan, a Rice-Rodri combination could just take the Man City engine room up a level again next season.

Follow the summer transfer window with Sky Sports

Who will be on the move this summer when the transfer window opens on June 14 and closes at 11pm on September 1 in England and midnight in Scotland?

Keep up to date with all the latest transfer news and rumours in our dedicated Transfer Centre blog on Sky Sports' digital platforms. You can also catch up with the ins, outs and analysis on Sky Sports News.