It is reported that tension between the two Italians spilled over into an ugly fracas after Balotelli mistimed a tackle on winger Scott Sinclair during a training session at Carrington.
Balotelli is understood to have taken exception to Mancini's intervention, leading to the pair having to be pulled apart.
It is reported that City staff including coach Brian Kidd rushed in to separate the duo, and photographs published on Twitter show there was an incident.
In the sequence of pictures, Mancini is seen to grab hold of Balotelli's orange bib in an apparent act of fury before the young striker is dragged away.
Balotelli has failed to hold down a regular place in Mancini's starting XI since signing from Inter Milan in 2010 for a fee of 22m euros.
He has regularly been linked with a move back to Italy over the past couple of years and the latest controversy again casts his future at the Etihad Stadium into doubt.
City refused to comment on Thursday, citing the public access around their training ground as the reason why what they regard as a relatively minor incident should cause such a stir.
But Mancini is certain to be questioned on the incident when he faces the press ahead of the club's FA Cup clash with Watford.