The 21-year-old forward moved to the Citizens for a fee worth around £14.2m plus add-ons and he has signed a five-and-a-half-year contract, but the Argentina international will remain on loan with River Plate until July at the earliest.
Guardiola has admitted that Alvarez is good enough to join the first team immediately, but he believes that it is best for all parties that the forward remains in his native South America for the rest of the season.
Speaking to the press ahead of Saturday's FA Cup fourth-round tie against Fulham, Guardiola said: "Congratulations for City, they work to be in the present but of course for the future.
"It's a player that could be already with us now but we have enough players, I don't like to have too many players in several positions. The best is stay in River Plate, he's done incredibly well.
"In the next pre-season he'll be with us, after we'll decide what happens, every season the squad moves. I am personally really pleased to have this talented young player for the next years.
Alvarez, who is regarded as one of the brightest talents in South America, excelled for River Plate in 2021, scoring 24 goals and registering 15 assists in 46 appearances across all competitions. body check tags ::