Guardiola is said to be resisting the signing of a new contract beyond the end of the 2024/2025 season.
That would mean he only has a season remaining at City in the Premier League.
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Per The Mail, he has already informed City that he will not be renewing his deal.
The club will now begin the process of finding a long-term successor to the most successful coach in their history.
City have won six of the past seven Premier League titles, while winning the Treble in 2022/2023.