The 19-year-old has signed a six-and-a-half-year contract worth more than £21m with the Spanish giants, and was unveiled at the Bernabeu on Monday.
Spaniard Diaz joined City from Malaga aged 14 in 2013 and made 15 first-team appearances for the club.
“Hopefully other players won’t decide to move on,” said Guardiola.
“I don’t want people who don’t want to stay here, to be with us and try to achieve what we want to achieve.
“If players want to stay, the door is always open for them.”
When asked if he was disappointed Diaz had left the club, Guardiola replied “no” but added: “I wish him all the best.”
Diaz is the latest young prospect to leave City after Jadon Sancho joined Borussia Dortmund last year, in comparison to highly-rated 18-year-old Phil Foden, who has made eight Premier League appearances this season.
“We did the same with Brahim as we did with Phil and Jadon,” said Guardiola. “They are important players but the only one who decided to stay was Phil.
“Players win opportunities on the field. You have to take a look at all big clubs in Europe at how many young players there are in their first teams.
“Young players need time – David Silva for example, he went on loan to big clubs to become what he is right now.
“Some players have patience, some don’t. The players, their family, their agent; they decide what is best for them.”
City have been questioned over their decisions to allow youth prospects to leave Etihad Stadium, having sold three during the summer as well as Sancho and Kelechi Iheanacho in 2017.
The club are standing by their record but Guardiola said managers needed to have “more courage” in their younger players, calling for a second league to be created in order to create a pathway for younger players to break into Premier League clubs’ first teams.
“Create a good second league and you will see how many players make it to the Premier League,” he said.
“Perhaps then managers in the Premier League will have more courage to play them.”
Who is Diaz and where does he play?
Diaz came to prominence during the 2017 Uefa Under-17 Championships in Azerbaijan when he scored three times for Spain, who finished runners-up to Portugal after beating England in the quarter-finals.
By that time, he had already been part of City squads that lost the 2016 and 2017 FA Youth Cup finals to Chelsea. He made his first senior appearance in September 2016 and signed a three-year contract days later.
At 5ft 7in, Diaz has a combination of pace and balance that was utilised in central positions in youth football. He has tended to be picked wider at first-team level, often cutting inside in the modern tradition, rather than staying on the wing to provide crosses for others.
Diaz’s problem is that City already have Raheem Sterling, Leroy Sane and Riyad Mahrez who are capable of doing the same job.
England international Sterling, 24, and 27-year-old Mahrez of Algeria have signed long-term contracts and 22-year-old Germany winger Sane is expected to follow suit over the next few months.
The truth is City’s coaching staff do not feel Diaz is as yet up to the level that would justify displacing any of those players, signed for £49m, £60m and £37m respectively.