It is also understood that it is Arsenal who broached the idea of including Raheem Sterling in the deal, though City have no desire to sell the England global and are determined to complete a cash-only transfer.
Sterling has started only one Premier League game so far with City this season against Bournemouth where he scored a dramatic late victor before being sent off for his celebrations.
The England winger has arguably been City's most impactful player this season with late goals in the games against Everton and Bournemouth earning them four points. He is due to play for Chile against Paraguay in a World Cup qualifier tomorrow night having returned from injury in Arsenal's 4-0 defeat to Liverpool on Sunday.
TWITTER Ed Aarons revealed the latest on Arsenal's interest in Nice star Jean Seri on Twitter
On Tuesday it was reported by David Ornstein of BBC Sport that Arsenal turned down an offer for Sanchez from fellow Premier League side Manchester City.
The Chilean worldwide made his season debut for Arsenal on Sunday, and he was hardly a factor in the 4-0 demolition the team suffered at the hands of Liverpool.
City and Arsenal fans, what do you make of this potential player-plus-cash deal?
Arsenal boss Arsene Wenger has insisted that Sanchez, 28, is not for sale despite him entering the final year of his contract and yet to agree to signing a contract extension.
Liverpool agree Naby Keita deal for 2018
The 22-year-old was said to have undergone a medical on Monday (28 August) and will officially join on 1 July next year. The move comes as Liverpool are reported to have made a bid to make Thomas Lemar their record transfer.