During his eight years at the Etihad, Toure helped the club win three Premier League titles - playing a major role in the 2011/12 triumph which represented the club's first league win since 1968.
Both City and Guardiola initially refused to comment, but the Catalan coach was asked about Toure's comments in an interview with Spanish show TV3 and said: 'It is a lie, he knows it.
"It's a lie and he knows it", Guardiola said.
Toure is leaving Manchester City this summer when his contract expires, and he launched a tirade against his former manager last week, suggesting Guardiola has issues with African players.
"We were together two years and it is only now when he says it. He never told me face-to-face".
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Toure and Guardiola have clashed in the past, and his agent, Dimitri Seluk, went one step further, insisting that calling the Catalan a "dog" - which another representative, Mino Raiola, did previously - is too kind to the City boss.
But he was limited to just 17 appearances in all competitions last season. It was a fantastic age where I was taking on the world and we took it on, with some incredible players, a young president [Joan Laporta], Txiki [Begiristain, now City's director of football].
"My time there as a coach is finished because I'm not the same as I was then, nor is the way they see me the same", Guardiola added.
"It was a generation of brutal players and the best player in the world".
"I even asked coaches for my stats".