The highly-rated 19-year-old centre-back has been linked with a return to his boyhood club Barcelona.
The Spaniard, who joined City from the Catalan giants three years ago, has made 19 first-team appearances this season.
The club did not replace former captain Vincent Kompany when he left the club last summer and Aymeric Laporte missed five months of the campaign through injury.
With Guardiola appearing to lack confidence in a John Stones-Nicolas Otamendi pairing, midfielder Fernandinho was deployed as a makeshift centre-back for most of the campaign.
The club this week signed Nathan Ake from Bournemouth for £40million but will now have to decide whether it makes sense to sell Garcia this summer or risk losing him on a free transfer next year.