Reports in Italy say that City were ready to join the race for the Lazio left back by tabling a £15million bid.
However, the Serbia international says his employers have promised not to stand in the way of him completing a dream move to the Bernabeu.
Tough tackler: Kolarov (right) lines up for Serbia in a World Cup warm-up against New Zealand
'I hope for the best,' said the 24-year-old. 'Recently, the (Lazio) club president, Claudio Lotito, promised me that he would let me leave for Real Madrid.'
Jose Mourinho tried to sign him in his second year at Inter Milan and is ready to have another go as Real Madrid's new boss after identifying Kolarov as a cheaper alternative to Chelsea's Ashley Cole.
'I hope that this second time works out,' said the defender. 'A few things have to still fall into place to complete the puzzle, but things are on a good path.
'Real are one of the greatest clubs on the planet and wearing that shirt is an honour for anyone who dedicates himself to football.'
Manchester City set to take on Real Madrid in race to sign Lazio star Alexander KolarovManchester City outcast Petrov is top of Bolton's summer shopping list Man City monitor Toulouse's Sissoko as replacement for veteran Vieira THE INSIDER: Bolton face battle to sign Manchester City's Martin Petrov, Birmingham in for Ryan Babel and Jermaine Jenas must weigh up Spurs futureMANCHESTER CITY FC