The Chile international, 28, has entered the final year of his contract at Arsenal and has been heavily linked with a move away from the Emirates this summer.
Alexis Sanchez has apparently demanded the Gunners pay him £400,000-a-week to sign a new deal.
Arsene Wenger has maintained his desire to keep his prized asset, but it said he could now consider selling him.
Manchester City have supposedly already tried convincing Wenger to let go of Alexis Sanchez by tabling a £50million offer, but the north London side refused to to business.
However, The Daily Star claim Manchester City are ready to test their resolve once again with a £70m bid plus centre-back Jason Denayer.
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Pep Guardiola has refused to rule out securing a reunion with Sanchez at the Etihad.
And the former Barcelona man admitted last month that he wants to play Champions League football this term.
City will likely be willing to meet Sanchez’s wage demands too, so the odds appear to be stacked in their favour.
The report adds Wenger could use the money from Sanchez’s potential sale to land top target Thomas Lemar from Monaco.
Sanchez made his much-anticipated return from injury for Arsenal yesterday, but was substituted after 62 minutes as they lost 4-0 to Liverpool at Anfield.