"Joe is our player. I think he's been the best coach in the world over the last six, seven, eight years".
Sancho has two years left on his contract at Dortmund, but the German outfit have the option of extending that deal.
There is less than three weeks until the English transfer deadline on 9 August - although players can move overseas up to 31 August.
'I'm not disappointed, ' Guardiola said. English football received an exceptional player at the end. If the days before they are exhausted and they don't want to fight for the Community Shield, play at Arsenal, then stay on holiday. It would have been a mistake if he had come here when he wanted to go to Maurizio and Chelsea.
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City play FA Cup winners Chelsea in the Community Shield on Aug 5 and begin their title defence at Arsenal a week later.
"Leroy has to accept that this decision may make him stronger". City moved the ball around quickly for the first time in the sort of style that Guardiola will demand from both him and Foden when the season kicks off.
Guardiola may have to use some of his fringe players for the Community Shield game against Chelsea on August 5 and Premier League opener against Arsenal eight days later.
Guardiola said: "What happened last season was a outcome of the work we did two seasons ago". These players are Premier League players but need the right development and are fighting against some of the best players ion the planet for games, it doesn't work like that and loans are the name of the game.
"We will try and find a solution".
The 26-year-old added: "Since I was little I was someone who always enjoyed challenges".