According to Sport Mediaset, Mendes has proposed sending Leão to the Etihad Stadium along with a cash contribution in return for Dias moving the other way to San Siro.
The Portuguese forward, who scored ten goals and added three assists in 31 appearances last season, has long been expected to leave AC Milan, who have been unable to find a buyer willing to meet their valuation of around €50m plus add-ons for a player under contract until 2028.
Leão himself indicated at the start of the summer that he felt ready for a new challenge.
Dias, also a client of Mendes, is contracted to Manchester City until 2029. The 29-year-old has made 256 appearances for City since his move from Benfica in 2020, scoring six goals and providing six assists, and has become one of the club's most consistent performers over that period. City signed him for a fee just over €80m five years ago.
Milan have already brought in one central defender this summer in Mario Gila from Lazio, but new head coach Rúben Amorim is understood to want further reinforcements in that position who fit his defensive system.
Mendes has been central to much of Milan's business this summer, having also been involved in deals to bring in Gonçalo Ramos and Diego Moreira. Any swap involving Leão and Dias would represent his most ambitious piece of business yet, though the scale of the deal means both clubs would need to agree on a structure that satisfies the value gap between the two players.
For now the idea remains firmly speculative rather than an active negotiation, with no formal proposal yet tabled to either club.
But with the transfer window entering its final stretch and Milan still short of the defensive reinforcement Amorim has asked for, it is a scenario that is likely to keep resurfacing until Leão's future is resolved one way or another.