Originally signed from Leeds United in 2022 for around £45M, Phillips’ move to City has been an absolute disaster as one of England’s brightest talents quickly fell down the pecking order under manager Pep Guardiola.
The 30-year-old’s only appearance of the season so far came as a late substitute in City's League Cup win over Huddersfield in September, and he has zero hopes of making it back in the first team any time soon.
As per the BBC, Sheffield United have launched a shock loan move for Phillips in what could be his saving grace in the twilight of his now stale career.
Relegation candidates Burnley and Wolves are also said to be interested as they aim to stay in the Premier League but no formal approaches have been made by either side as the transfer window comes to a close.
Having represented England 31 times, the City midfielder will be desperate to get on the pitch again, something that will only happen if he departs the club.
City are said to be prepared to let the England international leave this month as he is not part of his City plans for the rest of the season under Guardiola who will be happy to see him make the move to Sheffield United as the deal progresses.