Despite the fact that City already have a wealth of attacking talent at their disposal, manager Pep Guardiola is desperate to add Sanchez to his squad this summer.
The 28-year-old is entering the final year of his contract and Arsenal risk losing their prized asset on a free transfer next summer if he does not agree a new deal at the club.
This is the latest update to a transfer saga that has gone on all summer, with Sanchez being linked to City, PSG and Bayern Munich over the last few months.
Guardiola is still interested in the striker, but with the lack of speculation over the last few weeks, a deal seems increasingly unlikely as Sanchez looks set for another year at the Emirates.