Pellegrini’s stock is currently high. He led City to a Premier League and Capital One Cup double in his first year at City and has taken them to the knockout stages of the Champions League in each of his three seasons. The first hint of the changes to come came from Pellegrini at the end of a standard press conference to preview Tuesday’s Barclays Premier League trip to Sunderland. Business appeared to have been concluded when the Chilean said: “Before we finish I will tell you that I talked with the club and I will finish my contract on the original date in June. “We extended the contract one year more but with the clause that one of the club or me cannot use that extended contract. “So, I finish here on the original date, June 30. There has been a lot of speculation about things, but they (the club) are not doing anything behind me. I knew this one month ago. “I don’t think it is good to have speculation about different things. I prefer to finish (by announcing) today – that is why I have told the press and told the players. I told the club two weeks ago that I would do it.” Pellegrini will now hope to bow out on a high, with City well placed in the Premier League, through to the Capital One Cup final and still involved in the FA Cup. They also face Dynamo Kiev in the last 16 of the Champions League bidding to reach the quarter-finals for the first time. Guardiola, whose name alone will instantly see City linked with a host of the world’s top players, could now discuss future transfer targets with the club. He already has a strong relationship with two members of the City hierarchy having worked under chief executive Ferran Soriano and director of football Txiki Begiristain at Barcelona. He will arrive with a formidable reputation. He won 14 trophies in four seasons in charge at Barcelona and has also brought two Bundesliga titles to Bayern. Press Association Press Association Sport understands Pellegrini was kept up to date with the club’s negotiations with Guardiola, which began weeks ago. The club would also not have made the change had former Barcelona boss Guardiola declined their offer. City believe their man has resisted overtures from rival clubs to join them but Manchester United – with whom Guardiola was also linked – have insisted they were not one of his potential suitors. Pellegrini will now not take up the one-year extension he agreed to his original three-year contract last summer. Both he and the club agreed to make the announcement early to end persistent speculation over the situation. Stories tipping Guardiola for City had increased considerably since December’s revelation that he would be leaving Bayern in the summer. City also hope that bringing the matter into the open will galvanise the squad for the rest of the season as they continue to challenge in four competitions. They hope this way – with all loose ends tied up – it will play out differently to the situation at United in 2001 when the announcement of Sir Alex Ferguson’s retirement created some uncertainty. A club statement read: “Out of respect for Manuel Pellegrini and the players, the club wishes to make its decision public to remove the unnecessary burden of speculation. “Manuel Pellegrini, who is fully supportive of the decision to make this communication, is entirely focused on achieving his targets for the season ahead and retains the respect and commitment of all involved with the leadership of the club.” It is understood the club will not stand in Pellegrini’s way if he wants to look for other jobs during the remaining four months of the season. The club have not discussed a possible alternative role for Pellegrini as it is felt he still wants to be a front-line manager, possibly elsewhere in the Premier League. His relationship with City is believed to have remained good throughout. Pep Guardiola’s arrival at Manchester City next summer will end a four-year long pursuit of the Spaniard by the club. City have announced the appointment of the much-coveted outgoing Bayern Munich boss as head coach from next season with Manuel Pellegrini standing down. City have also revealed they first tried to bring in the 45-year-old two-time Champions League winner in 2012, a situation Pellegrini was fully aware of when he took over the following year.