The 1966 World Cup winner, 77, is “hopeful” he will beat the disease – 10 years after losing his first kidney to cancer.
The former goalkeeper’s remaining kidney will have to be removed if the new cancer grows according to doctors.
He is taking chemotherapy medication but a transplant could be the only option for the sporting hero if the disease worsens.
Banks, who played for Leicester City and Stoke City, said: “I have to hope for the best and carry on.
“I am one of many in the country who have it, I have to battle on.
“I regard my kidney problems as part of life, things tend to get harder to battle with.
“It’s one of those things. When I saw the doctor he said I should just act as normal. I am hopeful the medication will cure it.
Banks is fondly remembered by England fans for his heroic save from Brazil legend Pele at the 1970 World Cup.
And he revealed the famous save gives him the “confidence” to beat cancer, telling the Mirror: “People still talk about the save and I often think about it.
“If I could make a save like the one against Pele, while playing against the greatest in the world, then I will be able to battle through this health problem.
“It helps me. I would hope that might act as inspiration to other people in the same position.”