The England Under-20s international, who made his debut for City in the final game of last season, is expected to challenge Carlos Edwards for the right-back spot at Portman Road.
Ipswich boss Paul Jewell told the club's website: "We're trying to bring in Reece Wabara on loan from Manchester City.
"He's a right-back, who can also play at centre-half, but mainly he'll play at right-back.
"He's an England U20 international who's quick and strong and he will provide plenty of competition to Carlos."
The Tractor Boys, who are currently on a three-match unbeaten run in the league and sit in 12th place, host Brighton on Saturday.