City manager Roberto Mancini has already spoken to club chiefs about buying new players in the summer, but a number of players will be shown the door to raise funds for new recruits.
Along with Richards, Wayne Bridge, Scott Sinclair, Roque Santa Cruz, Maicon, Edin Dzeko, Carlos Tevez and Samir Nasri are likely to move away from Etihad Stadium.
And according to Mirror Football, Richards has been linked with a move to the Emirates. The 24-year old defender has been struggling with a knee injury for months and is lacking first-team opportunites with the Sky Blues.
Sagna has been eyeing a move back to France and Arsenal feel Richards is the right candidate to replace him despite having Carl Jenkinson in the same position.
City have been linked with big money moves for Radamel Falcao and Edinson Cavani but need to sell before buying any new players.
Tevez, who will turn 30 next year is being lined up by French side AS Monaco while Nasri, who has been criticised by Mancini recently, could move to cash-rich side PSG next season.
City sold Mario Balotelli to AC Milan in January for £22million but did not get a replacement for the Italian and with Edin Dzeko planning to return to the Bundesliga, City will look to strengthen their squad in the summer.