Nasri has been expected to join City for quite some time now but Wenger says the move is nowhere near completion.
Nasri was a surprise starter in Arsenal's 2-0 defeat at home to Liverpool on Saturday and, with 10 days to go before the transfer window ends, Wenger hinted the 24-year-old may yet remain in north London.
"He is happy here. There is no departure of Nasri at the moment," Wenger told French media outlet TF1.
"Maybe one day, but it's far, far, far from being done."
Nasri's departure would leave the Gunners severely undermanned in midfield after Cesc Fabregas completed his protracted move to his hometown club Barcelona last week.
To add to Wenger's problems he is also without Alex Song and Gervinho due to suspension while Emmanuel Frimpong, who made his starting league debut yesterday, will also serve a ban after he saw red against Liverpool.