Gundogan still has another year remaining on his contract but is expected to leave over the summer transfer window.
The Daily Star newspaper recently claimed that City upped their bid for the 25-year-old from £18 million to £21 million.
The Citizens do however, remain heavy favorites to sign Gundogan after City director of football Txiki Begiristain and Pep Guardiola held talks with the highly sought after midfielder.
The Germany international of Turkish origin did not start for Dortmund in the 5-1 victory over Wolfsburg yesterday but has played an important role in the German giants title race this season.
The Dortmund star has seven assist and three goals in 40 appearances for the Bundesliga giants this season.