Manchester City have turned to Martin Demichelis for centre-back cover and have agreed the payment structure ahead of his potential arrival from Atletico Madrid, according to a report.
Injuries to first-choice pairing Vincent Kompany and Matija Nastasic have left Citizens boss Manuel Pellegrini short of defensive options.
His back-up partnership of Joleon Lescott and Javi Garcia, usually deployed in midfield, conceded three goals as City suffered a surprise Premier League defeat to newly-promoted Cardiff City on Sunday.
Pellegrini's approach for Pepe was rebuffed by the Portuguese's club Real Madrid earlier this summer, and Goal.com now understands that Demichelis has been identified as an alternative.
The same source reports that Atletico have accepted an offer off £3.5m up front, with a further £500,000 subject to additional clauses, for the 32-year-old Argentine international.
Demichelis, formerly of Bayern Munich and Malaga, has yet to agree personal terms with City, but talks between the two parties are scheduled for Wednesday.
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