The 30-year-old Portuguese international joined City from Juventus in 2019 for £60 million and quickly became a key player under Pep Guardiola. However, after a falling out with Guardiola, Cancelo was loaned to Bayern Munich in January 2023 and spent the last season at Barcelona.
Although Guardiola hinted earlier this summer that Cancelo might still have a place at City, the full-back was not included in the squad for the club's first two Premier League games this season.
Cancelo leaves City after making 154 appearances and scoring nine goals during his time at the Etihad.