Cancelo only moved to the Etihad Stadium during the summer window, with a total of 10 starts and five substitute outings being made in all competitions.
However, AS claims that Valencia are keen to secure a reunion with the Portugal international, who represented the Spanish giants earlier in his career.
Despite a deal currently being perceived as unlikely, the report says that the La Liga outfit have placed the versatile full-back at the top of their shortlist.
Man City boss Pep Guardiola is unlikely to contemplate parting ways with the 25-year-old unless he is able to bring in a like-for-like replacement.
Valencia want to push through a temporary deal, potentially with the option of a permanent transfer later in 2020.