British press reported the former Bayern Munich player was heading for London in the January transfer window to bolster Arsenal's attack, which is set to be further deprived after Gervinho and Marouane Chamakh depart for the Africa Cup of Nations in January.
But when asked whether Arsenal planned to buy Podolski in January, Wenger replied: "No."
However, the Frenchman did not completely rule out the possibility of buying a striker in next month's transfer window. "I don't know yet. That was an honest answer," he said.
"It is a big test...football is about the form and performance of the day - that makes the difference. You ask me, can we beat them, I say yes. If we play at our best we can beat them, so let's be at our best on Sunday," Wenger said.
City, who have 38 points to United's 36, have been the pace-setting team this season and have lost only once in the league, 2-1 at Chelsea on Monday.
Arsenal now have 29 points in the league, still nine behind City, but a repeat of last season's 3-0 away victory over Roberto Mancini's men would put them right back in the mix.
"The turning point in our season was the test at Chelsea because we had not won away before that game," Wenger said.
"[The City game] is the second big test away from home for us. It's a massive test and we know that we want to be at our best. We are ready for it physically and mentally. We are prepared and will give absolutely everything to win the game."
