The Gunners have given up on trying to persuade Sanchez, 29, to sign a new contract at the Etihad Stadium, with the Chilean out of contract in the summer.

Sanchez has made it clear that he wants to join up with Guardiola at City and ESPN FC has been told that Arsenal have decided to accept a transfer fee now rather than let him leave for free at the end of his contract.

City were prepared to wait until the summer but were left with just Sergio Aguero as a recognised striker when Gabriel Jesus suffered a knee ligament injury that will rule him out for around six weeks.

Sanchez was close to joining City in the summer on transfer deadline day until Arsenal pulled the plug on a £60 million deal late in the day.

Arsenal want around £35m for him, according to sources, but City want to pay considerably less although an agreement is expected to be reached.

Meanwhile, Sanchez has reportedly fallen out with his Arsenal teammates, which could have hastened Arsene Wenger's decision to allow him to leave.

City are also considering buying a centre-back in the transfer window, with West Bromwich Albion's Jonny Evans remaining a leading option, although ironically they could face competition from Arsenal for the Northern Ireland international.