According to the UK Sun, Sterling who earns £180,000 a week, purportedly romped with the hooker in a Los Angeles hotel last month, while City were on preseason tour.
“Raheem may be a millionaire but he is a rude cheapskate. He seemed to assume that he would just be able to just sleep with me and not pay,” she told the newspaper.
It is believed he made contact with the woman while he was out celebrating with team-mates and was given her number by a UK-based friend.
The woman added: “Raheem had texted me a hotel room number that did not exist, so I was there waiting for him to show up. I was very close to leaving. Finally he arrived and we went to his room.
“Raheem seemed drunk and his breath smelled of alcohol. He was upset with me for not meeting him earlier.”
After the romp, they reportedly argued over money, with the woman demanding $4,000 (£3,000), but the England winger insisted he would only pay $2,000 (£1,500).
Sterling failed to leave the money in an envelope the next morning, but a City minder paid the woman £1,500.
Hitting back at the allegations, Sterling wrote in an Instagram post: “It’s sad to wake up to more nonsense in the tabloid press this morning.
“There’s so much said that, as a baller, you just have to suck it up and take it on the chin.
“I had to say “enough is enough”.
“Now I have to deal with these new lies!”