The Barcelona legend is Pep Guardiola’s number one choice to fill the void left by Arteta who is expected to be confirmed as Arsenal manager later this month.
Iniesta, 34, is considering a player-coach offer at the Premier League champions where he would link up with his former Nou Camp team-mate and manager Guardiola.
Arteta has been City’s assistant manager since leaving Arsenal in 2016 and is hot favourite to replace Arsene Wenger at the Emirates.
According to Yahoo Sport (UK), club officials are in talks with Iniesta and the Spaniard is keen on a deal.
Iniesta is one of the of the most decorated players in football history. A World Cup and European Championships winner, he has also lifted eight La Liga titles as well four Champions Leagues.