O'Neill: Milner wants to leave
The versatile 24-year-old, who played at the World Cup in South Africa last month, joined the Premier League club from Newcastle United for 12 million pounds in 2008.
GEAR: Get a Milner shirt
"I had a conversation with James before the World Cup and he intimated that he'd like to go," O'Neill was quoted as saying on the BBC's website.
"I'd imagine things will be resolved in the foreseeable future."
Milner has been coveted by big-spending Manchester City since the end of last season and manager Roberto Mancini confirmed on Wednesday their continued interest in the player.
O'Neill added: "City made an offer but it did not meet our valuation. I'm sure matters will be resolved soon. James is back next week having had extended holiday."