Foe was on a loan deal with City for all of last season but the club were not prepared to pay the esimated £6million that Lyon were demanding for the player.
However, it now appears that his agent has agreed to have the player made available on a free transfer.
“I have more or less reached an agreement that Marc Vivien Foe maybe allowed to go on a free transfer,“ said Foe's agent, Willie McKay.
“I am in negotiations with Lyon financial director Marino Faccioli to see if he can go on a free.
“Manchester City are still very much keen on him and there are a few other clubs interested in him.”