Although Grealish signed a five-year contract at Villa Park in 2020, City and Villa have both been made aware of the England international's desire to move to the Etihad Stadium this summer.
The result means City have failed to win their last four league matches. Speaking after the game at Villa Park, Guardiola said: "Aston Villa were better than us.
Liverpool will hope to have Diogo Jota back before the end of the season Aston Villa vs Liverpool predictionWith Villa limping towards the finish line in the Premier League after so many injuries across such a busy campaign, you'd have to back
The home team has been in top form at Villa Park, remaining unbeaten in five matches with impressive performances that have seen them score 14 goals. Chelsea is the next challenger to try and break Aston Villa's strong home record.
Leon Bailey opened the scoring at Villa Park but just two minutes later the Clarets had their equaliser through Zeki Amdouni before Moussa Diaby put the hosts back in front moments before the break.
The Gunners were knocked off the top of the table by Liverpool earlier on Saturday and faced a formidable task if they wanted to regain their place, with Villa winning 14 consecutive home matches in the Premier League since a February defeat
"It was only because Kovacic picked up an injury that Kante came in and was outstanding when he came into the side. He showed Tuchel what he could deliver. "I would play my best team in the first game against Villa.