Cancelo has not featured for the Blues since January 2023, when he left in acrimonious circumstances, unhappy at Rico Lewis replacing him in the team.
He has spent the last 18 months on loan at Bayern Munich and Barcelona but has not joined either permanently.
Barcelona want to re-sign him but are yet to make a bid and may struggle to afford him.
Now, Guardiola has confirmed Cancelo's status in the squad and has plotted a route back to becoming a City player again.
"He's training with us. We will see, maybe stay, maybe go on loan. I don't know yet," said Guardiola.
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