City are set to enter the market when the transfer window re-opens following their failure to defend the Premier League title, with Guardiola’s side welcoming champions Liverpool to the Etihad on Thursday night.
Leroy Sané’s imminent departure for Bayern Munich will leave City in need of a new winger as well as holes to plug in the centre of defence and midfield, with captain David Silva also on his way.
Sancho is open to moving back to the Premier League having left City for Borussia Dortmund as a teenager in 2017 and Manchester United are understood to lead the race for his signature.
City included a first refusal clause as part of the deal taking Sancho to Dortmund, meaning they have the right to match any offer for the 20-year-old.
But Guardiola has dismissed the notion that City will be among the clubs vying for Sancho this summer and suggested the England international made his bed when he left the Etihad three years ago.
“No, no, no,” Guardiola said, when asked about Sancho. “He decided to leave, why should he decide to come back? We wanted him to stay like Eric Garcia and Phil [Foden] now. He decided like Leroy now, myself, I decided to move.
“It’s going to happen so when he decided to move to Dortmund, it’s not because he is going to decide to come back one year later. It would make no sense. He didn’t want to be here, so that is why he doesn’t want to come back here.”
Guardiola nevertheless admitted that City are preparing for something of a squad overhaul, with an elite-level centre-back understood to be top of the shopping list.
Vincent Kompany is yet to be replaced following his departure at the end of last season, and that failure to fill the gap left by the former club captain has been widely blamed for the failed title defence.
“Some players have to be replaced,” Guardiola said. “But it’s not a disaster thing, or bad thing, it’s part of football for the age, for the normal situation and circumstances.
“It happens in other clubs and players who are considered important players for the club decide to leave, they don't want to be here and that was the case for Jadon Sancho and Leroy, especially Leroy because Jadon Sancho was in the academy.
“We cannot do anything else, as a club, if guys don’t want to stay they have to leave. We are not getting the best of these players if in their mind they are not happy here. This is the first thing and the second is with the age.
“But it happened and we have to rebuild it. It happens at clubs around the world, you never can be eternal, and we have to accept it and try to take the right decisions as a club to try to maintain the level that we have.”