The 28-year-old - who joined City for a reported £28.5 million in 2010 - and has made over 150 appearances in all competitions.
But Milner has become a victim of his own versatility and City's refusal to use him in his favoured central midfield position has seen him gradually become a fringe player.
"We've been in talks with the club," Milner said.
"We've talked about it and hopefully it can get sorted sometime soon.
''I don't want to be paid to sit and watch. You want to feel like you're contributing and enjoy your football as much as you can, so I am in a happier place now.''
Milner is now on England duty as Roy Hodgson's side prepare for Euro 2016 qualifiers against San Marino and Estonia.
He made his 50th appearance against Switzerland in September but of his caps, only 28 have been starts.
"There are two ways to react - you can sulk and mouth off to the press," he added.
"Or you can work harder on the training field, and that's the way I like to do it. It is in my character I suppose.
"Maybe in some ways that does count against me if I'm not sulking or ruining training when the manager leaves me out.
"I'm not naming names, but I've played with enough players for you to work out who (has sulked).
"But it is no good for the team if someone does that sort of thing. The team comes first, whether it is England or Manchester City."
