Guardiola had suggested during pre-season that Sane was not at the required level to start matches, but insisted ahead of the 1-1 draw at Wolves last weekend that the German had begun training well again.
However, sources close to Guardiola have indicated that he was disappointed with Sane's late cameo against Wolves, as well as his subsequent efforts in training.
In comments that appeared on City's Twitter feed on Saturday evening, the City boss confirmed that Sane had been dropped, rather than missing out through injury, and said he hopes the German "can be an important player" for the club this season.
#PEP: @LeroySane19 was dropped from the squad. Last season he was such an important player for us and we hope this season he will be a really important player for us as well. #cityvnufc — Manchester City (@ManCity) September 1, 2018
Guardiola was unwilling to criticise the 22-year-old in his post-match press conference, insisting that he has so many forwards that one had to miss out.
"Last game Phil Foden was not in the squad and it was so sad for Phil, and I'm so sad for Leroy now. But we have a squad, we have six strikers and I decided to play with two strikers, we have two wingers plus another one on the bench and that's why we decided this game he wouldn't be there.
"In the next games he will be ready to play."
Asked directly if he was happy with Sane's commitment, the Catalan replied, "Yes", before insisting he had no serious concerns about the winger's performance at Molineux.
"He played 10 minutes, he tried. He was not precise but he tried. They convince me, I am satisfied from the moment they run. Mistakes without the ball, taking decisions is part of the process."
Sane had to make do with three cameo appearances from the bench before being dropped on Saturday, while he was brought off at half-time in the Community Shield at the start of August.
Sane was cut from the Germany squad for this summer's World Cup by Joachim Low, with the winger's attitude believed to be one factor in his manager's decision.