Pep Guardiola is eager to reunite with the Chile forward, who he worked with during his time at Barcelona and City will test the Gunners’ resolve to keep the 28-year-old.
Sanchez, who is currently on Confederations Cup duty in Russia, has one year left on his current contract at the Emirates.
He is believed to be Guardiola’s top transfer target this summer and Etihad chiefs are convinced they can seal the deal for Sanchez, who is also wanted by Bayern Munich and Chelsea.
City are understood to be waiting until the Confederations Cup is over, before making an official approach for a man who has 72 goals and 37 assists in 145 games for the Gunners.
Arsenal have also tabled a new contract worth £275,000-a-week, to keep their star man.