Otamendi is set to join City this week with an agreement in place between the clubs.
The move could be announced as early as tomorrow after the Argentina defender touched down in Manchester for a medical.
And Diego Simeone has made Garay his priority replacement.
Manchester United had wanted to sign Otamendi to bolster their defence but lost out to City after spending too much time on Sergio Ramos.
Ezequiel Garay is on Atletico Madrid’s shortlist
The Real Madrid defender then signed a new deal at the Bernabeu.
And United could lose out on another target after monitoring Garay’s movements for the last 18 months.
Spanish paper AS reportthat Atleti are stepping up their bid for Garay although there are complications with current club’s Zenit’s financial situation.
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