Born in Cosenza, Calabria, Pancaro started his youth career with Acri. He later moved to the Torino F.C. Youth squad remaining with the club for two seasons, before being loaned to Serie C2 club Avezzano. Pancaro made his professional debut with Cagliari Calcio, after the club's owner Massimo Cellino acquired him in 1992; although he only made 10 appearances during his first two seasons, he soon established himself as a key member of the starting line-up. In the 1993–94 UEFA Cup, Pancaro made his European debut, scoring the match winning goal in the first leg of the semi-final, after coming on as a substitute, as Cagliari beat eventual champions Inter 3–2.