The Sun says the Ballon d'Or winner's agent, Moussa Sissoko, was seen at a luxury hotel in Madrid meeting with Viana.
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Viana was in Spain this week for City's Champions League defeat at Real Madrid.
And the Portuguese was snapped speaking with Sissoko at the Madrid hotel.
Dembele has two-and-a-half years left on his current PSG deal, with talks over an extension now stalling.
Spanish sources state the meeting between Viana and Sissoko wasn't formally organised, but the City chief was laying the groundwork for negotiations to open closer to the end of the season.