Valencia, Wolves and the Chinese Super League had all been touted as possible destinations, but it is now believed that a return to Mestalla is the defender's number one choice.
But whether the Spanish side are able to make that wish come true depends on several factors, chief among them qualification for next season’s Champions League.
Reports in Argentina last week linked Juventus and Chelsea with an interest in Otamendi, and sources close to the player have told Goal that while the centre-back likes the idea of a move to Turin, he wants to fully explore the possibility of a return to Mestalla first.
The Argentina international spent a season with Valencia before joining City in 2015, and it is understood that his agent, Jorge Mendes, could facilitate a move as he also has close ties at the Spanish club.
Yet the defender's wages could prove problematic, given he received a considerable payrise when he moved to the Etihad Stadium.
Otamendi was a crucial part of last season's 100-point title-winning campaign, making 34 appearances in the league alone.
This season, however, he has made just 31 competitive appearances in total, including 17 in the league.
He signed a new deal until 2022 in January 2018 but believes he should have been given more first-team opportunities in recent months and wants more playing time at another club for the final years of his career.