City had an £11m bid for Santa Cruz turned down in January and the 26-year-old is now rated at around £15m.
And the Manchester Evening News today claimed Hughes could be battling it with his former boss Alex Ferguson for the services of Santa Cruz.
United are also said to be targetting the Blackburn striker as young French hotshot Karim Benzema wants to spend at least another season with Lyon.
City's other transfer targets are thought to be Brazilian striker Jo, who plays for CSKA Moscow, and compatriot Ronaldinho.
City owner Thaksin Shinawatra is keen on luring the Barcelona superstar to Eastlands and asked about Ronaldinho during his first press conference, Hughes replied: "I'm always interested in outstanding football talent, and he comes into that bracket.
"There's a lot of talk and a lot of speculation about the players that could come in, but I'm always interested in good quality players. If they are available at the right price then I will try to bring them here," he added.
"Even with all the talk about who might be coming, I am the manager of the football team and I have to target players, recognise the weaknesses in the team and address them.
"Either I make the players in possession of the shirt perform better, to give them the chance to keep the shirt, or if not we address that. Then we'll look to bring better players in to fulfil that role. It's an ongoing thing, we will look to make the club as strong as we can as quickly as we can, but it is a process we will have to go through.
"At this stage we are very early into our tenure, there are a lot of things we have to go through but we will very quickly be targeting the players we want to bring here."