A fee of that scale would rank among the most expensive deals of the summer anywhere in Europe, and City's move underlines how central Fernandez has become to Enzo Maresca's thinking as he assembles his squad at the Etihad.
The Argentina international worked under Maresca during the Italian's time in charge at Stamford Bridge, a spell in which the pair struck up a productive relationship before Maresca's departure from the club earlier this year.
That history appears to be a significant factor now: City's manager is understood to be personally driving the pursuit, while Fernandez himself is said to be open to reuniting with his former manager.
Chelsea's valuation reflects both Fernandez's importance to their own plans and the leverage a selling club holds this late in the window, with the 25-year-old under contract at Stamford Bridge until 2029.
Whether Manchester City are willing to meet that price remains to be seen, though sources close to the negotiations suggest personal terms would not be an obstacle if the two clubs can find agreement on a fee.
Fernandez arrived at Chelsea from Benfica in January 2023 in a deal worth around £107m that was a British transfer record at the time, and has gone on to make well over 100 appearances for the club, captaining the side on occasion and playing a leading role in their Conference League and Club World Cup successes under Maresca.
His potential exit would represent a significant blow to Chelsea's midfield just as the club also works through separate departures involving Mykhailo Mudryk, Tosin Adarabioyo and Robert Sánchez on the same deadline day — a reshaping of Xabi Alonso's squad that shows no sign of slowing as the window enters its final hours.
With hours remaining before the window shuts, City and Chelsea are continuing talks over a price. Should the two sides find common ground, sources suggest the deal could be finalised rapidly given the lack of complications around personal terms, though a fee in the region of Chelsea's £120m valuation would make Fernandez one of the most expensive midfielders in Premier League history.