The 24-year-old Germany international has just one year left on his contract at the Etihad Stadium.
Sane, who is valued at €100m by Manchester City, has been on Bayern Munich’s radar since last summer but a serious knee injury suffered at the start of the season scuppered any plans of a potential transfer.
Bayern Munich look set to revive their interest in Sane when the 2019/2020 season concludes.
"Leroy said he doesn't want to extend the contract so it means he wants to leave and it is going to happen this summer or when he is out of contract," said Guardiola ahead of Monday's visit of Burnley.
"The club have talked to me, they've offered two or three times to extend his contract, he rejected so it means he wants to play in another club.
"If at the end of this season we arrive at an agreement with another club, he is going to leave.
"If not he will stay one more year and leave when out of contract."
“I’m so disappointed. When we make an offer it’s because we want him, he’s got special quality that is difficult to find.
“We tried before the injury, he rejected. He has other wishes and I understand, we want players who want to commit and achieve our targets.
“I love him so much, he’s incredible. I’ve nothing against him. He wants another adventure. That happens and we’ll help him while he’s here, and focus on the players who want to stay here.”
Sane was an unused substitute when Manchester City crushed Arsenal 3-0 at the Etihad on Wednesday.
Sane joined Manchester City from Schalke 04 in the summer of 2016 and has since won two Premier League titles with Pep Guardiola’s men.