Benfica confirmed on Thursday they had talked to Manchester City's Swedish coach Sven-Goran Eriksson about a possible return to Portugal, the club said in a statement.
"The club confirms talks...with Eriksson but up till now no details of the contract, namely salaries and timing, have been discussed," the club said.
On Wednesday, Benfica president Luis Filipe Vieira travelled to Manchester to talk to the former England manager about a possible return to the Lisbon club he coached for two spells in the 1980s and 1990s.
British media have suggested Eriksson will leave City at the end of the season because Thai owner Thaksin Shinawatra is unhappy with the club's performance.
Eriksson won the Portuguese league three times and reached the final of the Champions League (1990) and UEFA Cup (1983), during his two stints with Benfica.