City could not include more than 17 overseas players in their squad.
And Guardiola still has 18 on his books, despite letting four foreign internationals leave before Wednesday's transfer deadline.
Clubs can change three players after the group stage but Toure, 33, will not be able to play against Borussia Monchengladbach, Celtic and Barcelona.
The Ivory Coast international has played a major part in all City's trophy wins since he was bought from Barcelona, then managed by Guardiola, for £24m in 2010.
He has only played once this season, in the second leg of the Champions League play-off against Steaua Bucharest, when City were already 5-0 up from the first game.
It was rumoured Toure might leave the club following Guardiola's arrival, with Inter Milan one of the clubs who were interested.
However, the player never had any desire to leave City and intends to see out his contract, which expires in 2017.
The 17 overseas players Guardiola has chosen include new signings Leroy Sane and Ilkay Gundogan, who are yet to play for the club, skipper Vincent Kompany, who is recovering from groin and thigh operations which kept him out of Euro 2016, and 19-year-old forward Kelechi Iheanacho.