Juanma Lillo joined City in June 2020, reuniting the Spaniard with Guardiola after the pair's time together at Dorados in Mexico in 2005-06 _ when Guardiola was a player and Lillo was a coach.
City won the English Premier League in both of the seasons Lillo worked with Guardiola.
"My time at Manchester City has been one of the most enjoyable periods of my career," Lillo said.
"To work alongside Pep, his backroom staff and this group of players has been a pleasure and I hope to have contributed in a small way to the fantastic success we have enjoyed on the pitch.`"
City's director of football, Txiki Begiristain, said Lillo's "dedication, passion and desire to improve our squad have been evident from our results on the pitch throughout his time at the club.''
Lillo was at Chinese club Qingdao Huanghai before moving to City.
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