Diego's father and agent says Werder Bremen agreed to let the midfielder play for Brazil in the Olympics when they signed him two years ago.Cunha claims the issue was discussed when the player negotiated a move from Porto and the Bundesliga club had no problems.
However, since Diego was named in Dunga's Brazil squad for the Beijing games, their stance has altered and they are to seek talks with the 23-year-old when he returns to Germany on Sunday.
Bremen want to convince him not to accept Dunga's call, but with FIFA rules meaning the club are obliged to release the player, Diego looks likely be playing at the Olympics when they start the Bundesliga season next month.
"Diego will certainly be playing at the Olympics," said Cunha to Brazilian website UOL Esporte.
"It has been his dream since he was 11 years old.
"When we agreed a transfer for Diego (to Bremen) in 2006, this was the first thing we brought to the table.
"We knew Diego had a great chance of taking part in the Games and they (Bremen) told us that they would have no problem with that."
Diego will miss the first round of the DFB-Pokal on August 8 and the Bundesliga opener at Bielefeld a week later as well as the crunch clash with Schalke if the Selecao remain in the tournament for the duration.
Schalke are facing a similar fight to keep hold of their full-back Rafinha, although Bayern Munich have successfully prevented Lucio from appearing as he is over 23 and can therefore be prevented from playing by his club.
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