Cancelo is currently on loan at Bayern Munich but they will not exercise their €70 million buy option on the 28-year-old.
Real Madrid and Chelsea have been linked with potential deals for Cancelo in the upcoming transfer window thanks to his ability to play both full-back positions.
However, the Portugal international’s next move could be another short-term one with Barcelona now eyeing a loan move for him.
The Blaugrana have had to play Jules Kounde at right back for large spells of the current season and they will be keen to snap up a natural right-back.
Due to Barcelona’s financial struggles at the moment, signing Cancelo on a permanent deal is undoubtedly a tough ask and a loan move is the most probable option.
It remains to be seen whether Man City would be willing to sanction another loan exit for Cancelo, who has just over two years on his existing deal at the Etihad Stadium.
Cancelo has refused to rule out returning to his parent club despite rumours of him falling out of favour under City manager Pep Guardiola before his January exit.
“We have to see what the next five months will bring,” Cancelo said in his first press conference as a Bayern player.
“The contract is a loan contract and at the end of the season we’re going to talk about the situation, but now it is important to focus on our goals.
“All I can say to the fans and to you is that I was enjoying my time at Manchester City and am still under contract at this club.”
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