It is believed that both Manchester City and French side Paris St Germain will face a near £50 million fine and a sanction limiting them to 21 players - not 25 - for next season's Champions League unless they can satisfy Uefa and agree an alternative penalty
Manchester City are facing UEFA sanctions for breaching financial fair play rules.
City, are understood to be still strongly challenging the settlement offer from Uefa. On top of the squad reduction they also face a fine in the region of €60million (£49million) over three years, and a cap imposed for next season to ensure there is no rise on this season's Champions League A squad wage bill,
The sanctions are understood to be very similar to those being handed to Paris Saint-Germain - the two clubs are among nine European sides being dealt with by Uefa's club financial control board (CFCB) for FFP breaches.
City have until the end of the week to reach an agreement with Uefa over the sanctions - but it is understood they are the club furthest away from reaching any final settlement.
If no agreement is reached there is the prospect of the case being handed to a panel for a non-negotiable decision.
Neither City nor Uefa would comment but it is understood the club have been negotiating forcefully for a significant reduction in that sanction but have been struggling to make progress.
The risk, however, is that if they are unable to agree a deal with Uefa then they could face even stiffer sanctions from the CFCB's adjudicatory panel.
No club is expected to be excluded from the Champions League for breaching the spending limits, the maximum possible sanction - Uefa president Michel Platini said last month he does not envisage that to happen.