The Premier League champions could be hit with the hefty restrictions over signing Argentine wonderkid Benjamin Garre in 2016.
City want to spend heavy again this summer, but there are fears the Court of Arbitration for Sport will impose a ban during a verdict later this week.
Etihad chiefs are accused of breaching strict transfer rules when they signed Garre from Velez Sarsfield.
The club believe City unethically contacted the youngster when he was 15.
They then allegedly committed a breach of rules by signing the winger days after his 16th birthday.
If the title winners lose the case, they face a two-window transfer ban which could stop them registering players this summer and in January 2019.
However, City would have the right to appeal that could further delay the restrictions and allow Guardiola to sign his targets this summer.
The club are understood to be encouraged by the fact Fifa allowed the transfer to go through, and was not a breach of regulations because he holds an Italian passport.
City are adamant they did nothing wrong and acted within the rules to sign the Under-23 ace, according to the Daily Mail.
Barcelona, Real Madrid and Atletico Madrid have all faced similar sanctions in recent years after breaching rules following signing players aged under 18.
Guardiola is looking to spend more than £100m this summer, with Fred and Riyad Mahrez top of his wishlist.
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