Iheanacho has not been fancied by Pep Guardiola at Manchester City with Sergio Aguero and Gabriel Jesus all above him in the pecking order.
With Guardiola looking to rebuild his squad after a miserable first season at Manchester City, he is very keen on Aubameyang who is certainly leaving Dortmund this season.
With a host of club interested in the Gabon star, Manchester City are offering Iheanacho to the Bundesliga club for a cash plus player deal.
That would interest Dortmund who will be keen on Iheanacho as they also rebuild the squad.
Other Bundesliga sides, Hoffenheim and Bayer Leverkusen are said to also be interested in the 20-year-old Nigerian.