City docked their £24million striker two weeks' wages at the end of last season after suspensions forced him to miss 11 games in all competitions.
That decision was upheld by the club after Balotelli appealed, but the Italian has not let it drop and a three-man panel will now hear the case on Wednesday.
Professional Footballers' Association chief executive Gordon Taylor told the BBC: "We try to avoid situations like this wherever possible, but the player and club have not been able to resolve this situation."
Balotelli was sent off twice last season and also received a ban for stamping on Tottenham midfielder Scott Parker.
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