The midfielder was left out of the Premier League side's pre-season tour of the United States and joins Kelechi Iheanacho on the list of summer sales.
The result leaves the London club with plenty of work to do before heading to Old Trafford on next Monday in the opening fixture of the English Premier League.
It's a surprise to see Slaven Bilic still in charge at West Ham following a tumultuous campaign in which the Hammers eventually finished in 11th on 45 points. The writing was on the wall. It's also about keeping the back door shut and not conceding goals.
Bilic will not be as lucky as Guardiola when it comes to squad selection.
Coverage of Manchester City vs West Ham will be shown live on Eurosport.
Aaron Cresswell and Manuel Lanzini are believed to have minor injury issues.
"The difference is that the pace and quality that they have is scary, and you could see that", said the Croatian.
Only one will emerge victorious, with reigning champions Chelsea another of those to have spent big this summer in an effort to hold on to their crown. West Ham never visited or played against any Iceland team so far.
Ederson, Daniel Grimshaw, Robert Muric, Kyle Walker, Danilo, Vincent Kompany, John Stones, Raheem Sterling, Sergio Aguero, Eliaquim Mangala, Kevin De Bruyne, Leroy Sane, David Silva, Bernardo Silva, Fernandinho, Patrick Roberts, Nicolas Otamendi, Gabriel Jesus, Oleksandr Zinchenko, Yaya Toure, Tosin Adarabioyo, Brahim Diaz and Phil Foden.
The winner there, just as he was in the title race last season, was the Blues' Italian boss. The transfer window finishes August 31, we will see.
He is a brilliant technician with great vision and could reinvigorate City this season.