Tension between the two Italians spilled over into a fracas after Balotelli mistimed a tackle on winger Scott Sinclair during a training session at Carrington.
Photographs published on Twitter show the pair struggling before being separated by several members of the City staff, including assistant manager Brian Kidd.
Balotelli has failed to hold down a regular place in Mancini's starting XI since signing from Inter in 2010 for a fee of 22m euros and the relationship between the pair has always been volatile.
After a red card at Arsenal in April, Mancini told the press Balotelli may never play for the club again - but the following month the Palermo-born star went on to provide the pass for Sergio Aguero's title-winning goal against QPR.
Balotelli then shone for Italy at Euro 2012 - his goals and hold-up play helping Cesare Prandelli's men all the way to a surprise appearance in the final - only to find himself on the bench for the majority of the first half of the current season.