City opened talks with De Bruyne’s representatives in September in a bid to secure his long-term future ahead of next summer’s World Cup.
PSG came close to signing the Belgian before he joined City in 2015 and the French club are keen to tempt him again as they look to assemble a side capable of winning the Champions League.
They have made it known to the midfielder's camp that they will make a big-money move at the end of the season, if he were to give any indication that he wants to leave the Etihad Stadium.
However, De Bruyne is said to be 100 per cent committed to City, and particularly happy with life under Pep Guardiola, which is why club sources believe contract talks have progressed so smoothly in the last month.
Those sources have told Goal that an agreement on a new deal is already “very close”.
De Bruyne’s agent, Patrick De Koster, said last week that he would meet with City in the coming months to discuss a contract on par with what Neymar and Kylian Mbappe earn in Paris.
Yet Goal understands he has already met with City officials in Manchester and that a deal worth in excess of £250,000 per week is close to being finalised.
That figure is significantly less than Neymar's £600,000-per-week deal with PSG but is regarded by all relevant parties as recognition for the midfielder’s fine performances so far this season and his place in the club's plans for the coming years.
It is also expected that De Bruyne will extend the length of his current agreement, which runs until 2021.
The 26-year-old has emerged as a front-runner for the Premier League's player of the year awards this season thanks to his role in helping establish City as title favourites in the opening weeks of the season.
City do not want to be at risk of losing any of their top stars if they perform well in Russia next summer, which is why Gabriel Jesus, who only signed for the club last year, is also set for improved terms.