The Portugal international was formerly a mainstay of Pep Guardiola's defensive setup, where he blossomed as an inverted full-back on both the left and right-hand side.
Cancelo - who joined City from Juventus in a £55.3m deal in 2019 - has conjured up a total of nine goals and 21 assists in 154 matches for the Premier League champions in all tournaments over the past five years.
However, the 30-year-old suddenly fell out of favour under Guardiola at the start of the 2022-23 season, seeing him join Bayern Munich on loan for the remainder of that campaign before a spell at Barcelona last season.
Cancelo made an impression under Xavi last season, leading to talk of a potential permanent move to Catalonia, and Barca are believed to be fearful of losing current first-choice left-back Alejandro Balde.
Cancelo 'emerges as number one target' for Al-Hilal
Barca president Joan Laporta confirmed earlier this year that a permanent deal for Cancelo would be something that his side would explore, but they have seemingly been priced out of a move and are now targeting Tottenham Hotspur's Sergio Reguilon instead.
All the while, Cancelo has been training at Man City - where he remains under contract for another three years - and Guardiola suggested earlier this month that he could still resurrect his Citizens career.
However, as Kyle Walker, Nathan Ake, Rico Lewis and Josko Gvardiol are all ahead of Cancelo in the full-back pecking order, the versatile Portuguese is still expected to leave for good before the August 30 deadline.
According to journalist Fabrizio Romano, Al-Hilal - the reigning Saudi Pro League champions - have now come forward with an official bid for Cancelo, who has been identified by head coach Jorge Jesus as a priority target.
The Middle Eastern giants are also discussing personal terms with Cancelo, who could link up with Neymar, Aleksandar Mitrovic, Ruben Neves, Sergej Milinkovic-Savic and Kalidou Koulibaly if he completes a move.
Romano adds that Cancelo could arrive at Al-Hilal as a replacement for current right-back Saud Abdulhamid, who is apparently in talks over a transfer to Italian giants Roma.
Could any other players leave Man City before transfer deadline?
Barring Savinho, it has been all quiet on the incomings front for Man City this summer, with the powers-that-be instead boosting their coffers and trimming their wage bill with some notable exits.
The Citizens have already secured a club-record £63.8m fee for Julian Alvarez, while also selling Taylor Harwood-Bellis, Sergio Gomez and Tommy Doyle while loaning out Yan Couto (Borussia Dortmund) and Kalvin Phillips (Ipswich Town).
Cancelo now appears to be leading the queue of players who could depart between now and August 30, a list that also includes midfielder Maximo Perrone, thought to be close to joining Serie A side Como.
Issa Kabore seemingly has no future at the Etihad either, while Jack Grealish's future has been called into serious question this summer too, but he is likely to stay for at least one more season.