Milner, who just completed his second season at Villa Park, told O'Neill at the beginning of the offseason that he would like to move:
"There is a question mark over James Milner," O'Neill said. "I had a conversation with James before the World Cup and he intimated that he would like to go at that time.
"I haven't spoken to him since. I know there have been conversations with his agent and our chief executive. Manchester City have made an offer for the player but certainly there is a difference in valuation, but I'm sure things will get resolved."
Manchester City's first offer for Milner was rejected earlier this offseason, with a bid of £20 million said to be £10 million pounds short of Martin O'Neill's desired price. Even if Aston Villa and Manchester City meet somewhere short of O'Neill's £30 million price tag, the return would represent a coup for a player bought a relatively short time ago and for a much lower price.
Milner was acquired two summers ago from Newcastle United for £12 million, since becoming a regular in the England national team. In that time Milner has developed from a traditional right winger into a midfielder who can play across the width of the field. The 24-year-old has two years left on a four-year contract signed when he moved from St. James' Park, where he played after his 2004 move from Leeds United.
At this summer's World Cup, Milner started three of England's four matches, providing the assist on Jermain Defoe's goal that defeated Slovenia, 1-0, allowing England to advance out of Group C. Since making his senior team debut last year, Milner has been capped 11 times by the Three Lions.
With his requested move, Milner looks to follow the path of fellow England international Gareth Barry, who joined Manchester City from Aston Villa last year. Barry had been the subject of a prolonged transfer saga which linked him to Liverpool during the summer of 2008. After losing his captaincy at Villa Park and playing-out the season for Martin O'Neill, Barry was surprisingly transferred to Manchester City.
Now City looks to add another Villan, increasing their summer haul that already includes former Valencia winger David Silva, defender Jerome Boateng from Hamburg, and manager Roberto Mancini's latest signing, defensive midfielder Yaya Touré, formerly of Barcelona. The Citizens have also agreed to a fee for Lazio's Aleksander Kolarov, with the left back's transfer awaiting finalization of personal terms. In addition, Manchester City has been linked with a move for Wolfsburg striker Edin Dzeko.
For Martin O'Neill, the move would leave his team thin in central midfield, where Milner was most often deployed after Stewart Downing's mid-season return from injury. Currently, Aston Villa has captain Stiliyan Petrov, Nigel Reo-Coker returning from injury, as well as promising youngster Fabian Delph, purchased from Leeds United last season. Delph, however, continues to recover from a cruciate ligament injury which will keep him out until late 2010.
Steve Sidwell also received time last season, though the 27-year-old has been linked away from Villa Park in search of a larger role than he's been afforded under O'Neill.