0122 GMT January 23, 2018
The Gunners have given up on trying to persuade Sanchez, 29, to sign a new contract at the Emirates, with the Chilean out of contract in the summer.
Sanchez has made it clear that he wants to join up with Pep Guardiola at City and ESPN FC has been told that Arsenal has decided to accept a transfer fee now rather than let him leave for free at the end of his contract.
City was prepared to wait until the summer but was left with just Sergio Aguero as a recognized 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 wants around £35 million for him, according to sources, but City wants 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 is also considering buying a center-back in the transfer window, with West Bromwich Albion's Jonny Evans remaining a leading option, although ironically Citizens could face competition from Arsenal for the Northern Ireland international.
Wenger insisted the situation regarding Alexis Sanchez's future is “very quiet” despite speculation intensifying over a switch to the Premier League leader.
Wenger said he has “nothing” new to report about Alexis, telling a press conference on Tuesday, “When solicitations happen you respond to it but at the moment it's very quiet.
“I have nothing to add to what I said before on that."
Alexis has scored eight goals and registered four assists in all competitions for Arsenal so far this season.
The forward was part of the Barcelona side which won the 2011/12 Copa del Rey under Guardiola before the Catalan stepped down at the end of that season.