Gunners manager Arsene Wenger may be willing to ask his club to pay £25m to take the 30-year-old Northern Ireland international to Emirates Stadium.
Arsenal have the advantage of knowing the Baggies are interested in their 32-year-old full-back Mathieu Debuchy, who wants regular first-team football.
City need cover for captain Vincent Kompany, who is injured once again.
France defender Eliaquim Mangala has played 14 times for the club this season but manager Pep Guardiola does not view the 26-year-old as viable long-term back-up.
Other Premier League clubs are also interested in Evans but cannot match the lure of European football for a player who was on the bench for Manchester United’s Champions League final defeat by Barcelona in Rome in 2009.
Evans joined West Brom from United for £6m in August 2015.
He still has 18 months remaining on his Baggies contract but has not been offered an extension, although he has told the club he has no interest in signing a new deal.
West Brom rejected interest from Arsenal, Manchester City and Leicester in the summer but this month could be their last chance to generate the kind of fee that would allow new boss Alan Pardew to bolster his squad.
Evans’ family are still based in the north west and it is thought his preference would be to remain in the area.
Nevertheless, he is unlikely to reject the opportunity to join a club of Arsenal’s standing on those grounds alone.
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