The Portugal international has made 154 appearances since joining Man City from Juventus in the summer of 2019.
However, Cancelo has not played for the Citizens since January 2023, having spent time out on loan following a breakdown in his relationship with Man City boss Pep Guardiola.
Cancelo spent the second half of the 2022-23 campaign with Bayern Munich, before he was loaned out to Barcelona for the 2023-24 season.
The 30-year-old made a positive impression with the Blaugrana, contributing four goals and five assists in 42 competitive matches.
Cancelo prioritising Barcelona return
Having been impressed with Cancelo's loan spell, Barcelona are keen to re-sign the defender ahead of the 2024-25 campaign.
According to Sport, the Man City man has made it clear that he wants to return to the Catalan giants this summer.
The report claims Cancelo has turned down offers from elsewhere, including a proposal from his former club Juventus.
Cancelo is not prepared to entertain a return to Italy despite being a transfer target for new Juventus boss Thiago Motta.
With Cancelo prioritising a move back to La Liga, Barcelona are continuing to hold talks with Man City over a potential deal.
Are Man City prepared to consider another loan switch?
The Citizens want to secure a permanent sale and have set a €25m (£21m) asking price, with Cancelo still under the summer of 2027.
However, Man City are seemingly willing to soften their stance and entertain a loan move with an obligation to buy at the end of the season.
From Barcelona's perspective, they would rather make it a non-mandatory purchase clause or an obligation to buy if certain conditions are met.
Cancelo hopes the two parties can come to a swift agreement so he can return to Barcelona following his summer break rather than linking up with Man City for pre-season.