A source revealed that the Premier League defending champions are likely not to be allowed to do transfer business in the two immediate windows - similar to what Chelsea are going to go through as well.
Pep Guardiola was thought to be planning a summer swoop for Leicester City defender Ben Chilwell, as well as a long-term replacement for Fernandinho.
According to The Sun, FIFA are set to announce within days that City breached rules over the transfer of minors.
However, if the worst came to the worst and the former Borussia Dortmund man simply wanted to run the contract down, City would be free to sign players again in that summer window.
A Federation Internationale de Football Association insider told SunSport: "We have been investigating City as part of a long-term investigation".
Premier League champions Manchester City will reportedly be hit with a two-window transfer ban by Federation Internationale de Football Association which means Pep Guardiola's side will not be able to make any new signings until the summer of 2020 if the suspension is upheld.
Last year, two players from the academy, Sierra Leone's George Davies and Ghanaian Dominic Oduro, told Danish newspaper Jyllands-Posten that they signed for City and played in youth matches before they turned 18.
And that investigation was broadened later in 2018 when a second Danish newspaper, Politiken, published a story that claimed City had a secret deal with Vernon to have first refusal on the best prospects from Right to Dream.
The Blues were also fined nearly £400,000 for a similar offence and it is claimed an announcement is "coming very soon".
According to Fox Sports, the guidelines state that: "There are only three ways that worldwide transfers for players under 18 can go through - if the players' guardians move to the country for non-footballing reasons, if the family and the club are based close to the relevant national border or if the transfer takes place within the European Economic Area while the player is at least 16 years old".