England international Sancho has been sidelined for more than a month with a thigh problem and missed last week’s first-leg defeat at the Etihad Stadium.
The 21-year-old is making progress in his recovery but Wednesday’s match comes too soon.
Dortmund interim coach Edin Terzic said: “Jadon won’t be at our disposal. He trained again, he is doing his best, we would like to have him available but he won’t be.
“We have to take our time with him.”
Dortmund also have injury doubts over experienced pair Marco Reus and Mats Hummels for the clash at Signal Iduna Park.
Terzic said: “There are a few slightly injured. We will have to wait. Marco Reus and Mats Hummels needed to be substituted and leave the pitch on Saturday.
“We have another training session and we will see who will be at our disposal.”
City lead 2-1 after the first leg with Paris Saint-Germain or Bayern Munich awaiting the winner in the semi-finals.