According to reports, Etihad chief executive Ferran Soriano had a meeting with president of the Portuguese giants Luis Filipe Vieira and Jorge Mendes in London yesterday.
Super-agent Mendes is a key deal-maker for Benfica and the trio met at the Bulgari Hotel in Knightsbridge.
Felix, 19, is a target for Pep Guardiola with City in negotiations to sell Leroy Sane to Bayern Munich.
The Premier League champions are believed to have rejected a £70m bid from the German giants for the winger yesterday as they hold out for closer to £90m.
Sane is stalling on a new deal at the Etihad and that could prove crucial for the two clubs to eventually strike a deal.
City say that Soriano’s meeting with Vieira was a chance encounter but Felix would be a perfect addition to Guardiola’s Treble-winning squad.
Guardiola wants to keep his squad hungry for more success and the youngster is seen as one of the brightest prospects in Europe after an amazing start to senior football with Benfica.
City director of football Txiki Begiristain went to Benfica earlier in the season primarily to keep tabs on Eintracht Frankfurt striker Luka Jovic.
Serb star Jovic, 21, found the net in that game but the star of the match was Felix, who hit a hat-trick in a 4-2 win.
Felix is seen as a striker but can play across the attacking line with his form erasing fears at 5ft 9in he would be too small for the Premier League.
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