The Premier League champions must decide this month whether to trigger a clause allowing them to buy back the Brazil international for a fee of around £27.5million.
But it is currently considered unlikely, with Luiz remaining very much part of Villa boss Dean Smith’s planning for next season.
The 23-year-old joined Villa for £15m two summers ago having never made an appearance in two years at City after failing to obtain a work permit following a 2017 switch from Vasco De Gama. A buyback option, which finally expires this month, was included in the deal.
Luiz has made 69 Premier League appearances for Villa, scoring three goals. Though he suffered from inconsistent form during the second half of last season, he is still regarded as a key player with huge potential.
Away from Villa, Luiz is set for a busy international summer with Brazil in the Copa America.