The 29-year-old confirmed the news after helping Belgium to a 2-0 win over England in the Nations League on Sunday night.
Speaking to Belgian TV station VTM Nieuws, De Bruyne said: “I am at a good club [with] good owners.
“We are a bit in talks – not advanced. At the moment I am doing the talks myself.
“I would like to stay with the club, so it’s easy. If I didn’t want to stay, it would take someone to mediate. But when you want to stay, it’s not so difficult.”
De Bruyne – whose current contract expires in 2023 – joined City from Wolfsburg in 2015 and has gone on to make 232 appearances for the club.
He admitted earlier this year that he would be forced to consider his future at the Etihad Stadium if City’s two-year ban from European competition was upheld.
However, City successfully overturned the ban ahead of the 2020/21 campaign, allowing them to compete in this season’s Champions League.