City’s offer for Torres, 20, comes days after it was reported that the player has agreed personal terms with the English club.
And City are using the player’s decision to join them and his contract situation to try and get him cheap.
Torres is out of contract next June and can sign a pre-contract with another club in January.
Pep Guardiola’s City are willing to pay a €35m base fee with more to follow in variables.
In any other circumstances this offer would be considered derisory, but Valencia are in a weak negotiating position.
City chief executive Ferran Soriano has made it clear that they will not offer more than €35m up-front for Torres.
Valencia must now decide whether to take a tough stance or risk losing Torres for nothing in a year’s time.
The Spain winger has been coveted by Europe’s elite, but it is City who are now closest to signing him.