South America's biggest city had been considered a lock as one of the football host cities for the 2016 Rio Games, but officials now say they will have to analyze the list of requirements for the tournament to see if it will be possible to participate.
Sports Secretary Celso Jatene told the Folha de S. Paulo newspaper that it is "not guaranteed" Sao Paulo will be able to host games.
Sao Paulo was pre-selected by local organizers as one of the six football cities for the Olympics, along with Rio de Janeiro, Belo Horizonte, Brasilia, Salvador and Manaus. All of them hosted matches during last year's World Cup.
FIFA has the final say on the host cities. FIFA's Olympic organizing committee will meet in Zurich next week to discuss the issue and possibly make a recommendation.
The governing body has already hinted Manaus may be dropped because it's too far from the Olympic centre in Rio. The city is about 3,000 kilometres (1,800 miles) from Rio in the Amazon jungle.
Sao Paulo had originally planned on using two venues to host games but Jatene said that only Corinthians' Itaquerao stadium, which opened the World Cup, would be used if the city does participate.
Rio is expected to host games at the Maracana, where the World Cup final took place, and at the Engenhao stadium, which will also host the athletics competitions.
The southern city of Porto Alegre and the northeastern city of Fortaleza had previously indicated interest in hosting matches and could become options if Sao Paulo and Manaus are dropped.
Football is the only Olympic competition that will be played outside of Rio. There is a need for several host cities because the tournament is played with 16 nations in the men's side and 12 in the women's.
The competition will be extra special for Brazil's national team as it's the only significant football tournament it has never won. Mexico beat Brazil to win the men's gold at the 2012 London Games.
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