It was previously reported in media City had told Guardiola to name his price to replace current manager Roberto Mancini, the Daily Star reports.
City sporting director Txiki Begiristain met with the Spaniard but the former Barcelona boss told friends it is the United job he wants, it reported.
That is expected to be available in the summer with Ferguson planning to retire but even if he changes his mind, Guardiola is prepared to wait, the paper said.
In a huge snub to City, Guardiola would extend his sabbatical should Fergie decide to stay, the paper added.
Guardiola could double his money at City but is more interested in the Old Trafford project and has met Ferguson over the last few months to discuss it, it further reported
The men have property in New York and are reported to have met at least three times there recently.
A three-year deal is on the table for Guardiola who will want two assistants and three new coaches for the clubs's youth programme. (ANI )