The England winger has over two-and-a-half years remaining on his current deal.
But ‘Sky Sports’ revealed that Manchester City intend to open talks to offer him an improved contract.
It comes as no surprise in light of recent performances from the 22-year-old, who has scored 13 goals in 19 appearances in all competitions to help City remain unbeaten this season.
Guardiola’s side currently sit eight points clear at the top of the Premier League table having won 13 of their 14 matches, and it’s largely thanks to Sterling’s displays.
The forward netted a 96th-minute winner against Southampton on Wednesday, his 34th for the club in 113 appearances since joining from Liverpool in July 2015 in a deal worth up to £49 million.