Bayern Munich will not activate the €70 million option to buy in the loan deal they agreed for Joao Cancelo, according to Kicker.
The Portuguese wing-back has failed to establish himself in Bavaria and will return to Manchester City this summer.
Bayern are unwilling to negotiate a reduced fee for the multi-purpose wing-back and will send him back to his parent club.
Despite Cancelo debuting with aplomb in Germany, recording consecutive assists under former Bayern Munich manager Julian Nagelsmann, they pushed him to the side.
New boss Thomas Tuchel left Cancelo on the bench for Bayern’s game against Borussia Dortmund, highlighting he is surplus to requirements at the Allianz Arena.
It is unclear whether City would keep the former Juventus man at the club. They could try to sell him or look for another loan destination.
Cancelo was the toast of the Premier League last season, shining in both full-back roles under Pep Guardiola. He made 36 league starts and scored one goal, recording seven assists.
However, despite selling Oleksandr Zinchenko to Arsenal last summer, Guardiola went with Nathan Ake as a left-back despite the Dutchman being a central defender.
Guardiola preferred Kyle Walker and Rico Lewis ahead of Cancelo at right-back. The 28-year-old wanted game time, and Bayern came calling.
The experience has not gone to plan for the former Valencia man, but he will still have suitors this summer with his fantastic ability.
Some clubs may be wary that Cancelo fell out with Massimiliano Allegri at Juventus and Guardiola at Man City.
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