The Chile international will be out of contract at the end of the season and is not expected to sign a new deal with the Gunners.
Manchester City came close to signing Sanchez in the summer after reaching a £60m agreement with Arsenal, only for a move to break down on deadline day.
According to the Daily Mail, there are growing concerns over Sanchez's commitment to the club from players and staff, which has convinced the board to cut their losses in the New Year.
The report goes on to claim that Arsenal know they will not receive an offer similar to that made by the Citizens in the summer but would be willing to entertain bids upwards of £35m for the 29-year-old.
As well as Man City, Paris Saint-Germain are believed to be interested in the former Barcelona forward.