The Swedish international has been linked with a loan move to a number of Premier League clubs recently, with first-team opportunities at the Etihad Stadium limited.
But, a switch to Spain now appears to be most likely, with Malaga and Sevilla both interested in the 20-year-old.
City are believed to be willing to allow Guidetti to leave on a temporary basis in a bid to gain match experience.
With the likes of Sergio Aguero, Mario Balotelli, Carlos Tevez and Edin Dzeko all competing for a starting spot, the youngster has been pushed aside by manager Roberto Mancini.
The player himself is keen on a stint in Spain, although it is thought that a number of Italian sides as well as Newcastle and Sunderland are monitoring the situation.
His representatives are believed to be in talks with City to discuss the best option for his development.
Guidetti spent last season on loan with Feyenoord, netting 20 goals in the Dutch top-flight.
This led to reports that he may be able to force himself into Mancini’s first-team set-up, but, as of yet, he has failed to do so.