The Etihad Stadium outfit have failed to reach the knockout stage of the competition in two consecutive campaigns and were unable to secure a single win last term, finishing bottom of their group behind Borussia Dortmund, Real Madrid and Ajax.
However Pellegrini, who guided Malaga to the last eight of the competition last season, will see his January budget bolstered by the club's hierarchy should he improve on City's recent continental performances.
The club hierarchy are determined to see Pellegrini's men position themselves as a powerful European force, and were impressed by the Chilean's impressive continental record with Malaga and former club Villarreal before appointing him to replace Roberto Mancini in June.
Sources close to the club have revealed that City will sanction a significant January spending spree in order to strengthen the depth of the squad, with the club aiming to fight on four fronts in the new year as they attempt to regain the Premier League title from Manchester United.
Club officials are also hoping to target players from clubs who fail to progress from the group stages should City qualify, with the defence having been highlighted as an area where the club could look to improve.
City have spent over €104m this summer, adding Fernandinho, Jesus Navas, Alvaro Negredo and Stevan Jovetic to the squad which finished 11 points behind champions United last term.
Despite being happy with the club's summer business, Pellegrini has admitted that City may look to make a further signing before the end of the transfer window on September 2.
"I’m very happy with the squad we have but if we think it’s important we need another player we’ll see next week," said the Chilean earlier this month.
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