Per O'Rourke, the player has two years of his current terms to run but City are reportedly keen to reward Sterling and offer him a fresh contract.
"I also thought if next season is not going well, if it's the same, then Txiki [Begiristain, City's sporting director] or Ferran [Soriano, the club's chief executive] would decide, "Okay Pep, you are not good enough to do what you want to do with those players", and they would make a change".
"No doubts, it's so important (to keep him)", said the City manager. Goodison is always a tough ground, the Manchester derby is going to be very, very hard and we know how well Tottenham play at Wembley.
The 20-year-old forward scored the only goal of the friendly between Brazil and world champions Germany on Tuesday, suggesting that after spending the first two months of 2018 recovering from a knee injury, he could be about to enjoy a breakout tournament at the World Cup.
"It's so important for him", Guardiola said of the goal. City will be without defender John Stones, who came off during England's 1-1 draw against Italy. "Believe me, I am preparing for Everton like it's the most important game we have to play".
Victory over Everton on Saturday would set City up for the derby clash with Manchester United the following week - where a win would see them crowned champions. This season's result (at home) was much better but tomorrow is another game.
He had said: "In Madrid, I don't have the confidence a player needs".
"Goodison is always a tough place to go and I think it would be a mistake to do otherwise".