Certainly the Guardian suggests so:
Aston Villa have agreed a fee with Manchester City for Richard Dunne, believed to be about £6m...the Villa manager has identified Dunne as a replacement for Martin Laursen, who retired at the end of last season, and is likely to offer the 29-year-old the captaincy at the Midlands club when he discusses personal terms. Dunne has almost three years remaining on his contract at City but the arrival of Joleon Lescott this week, following the signing of Kolo Touré earlier in the summer, means that he faces the prospect of spending much of the season on the substitutes' bench.
I don't know if it is anything other than strong rumour at the moment, and inevitable folloiwng Lescott's arrival, but you have to imagine there would be a strong market for Dunne should he be available.
I know Hughes spoke following the signing of Joleon Lescott that he expected interest in Dunne, but I'm sure he would prefer to keep him in the squad.
However, whilst Nedum Onouha has time to be patient, Dunne does not. Not only it is a World Cup year (with Ireland having a good chance of qualification) but you don't imagine Dunne is the type of player who can (or wants to) dip in and out of the side, playing 15-20 games a season - he is very much all or nothing, and has been a regular ever since joining us.
It would be a significant move should he be sold though. By no means being forced, he is currently the longest serving player at the club, a link to previous regimes and above all, club captain.
Selling Tal Ben-Haim this wouldn't be.
It does look likely that Dunne will be on his way though. Kolo Toure has impressed in his opening couple of games, and Lescott is not about to sit on the bench after costing £24 million. Central defensive partnerships are not those you generally rotate either (unlike more attacking positions).
As I see it, the only possible bar to a move would be the speed in which it would need to be concluded as the transfer window is ticking down. Whilst I'm sure it is something Dunne has likely contemplated, to actually agree a move is far bigger proposition.
Depending on the line-up for the Palace game, it is seemingly likely that Dunne may have played his final game for the club.