Forward Alexis Sanchez will leave Arsenal in January if a suitable offer arrives and a replacement is secured.
It is understood the Gunners hierarchy have privately accepted for some weeks that Sanchez is likely to depart after three and a half years at the club.
However, Arsenal are reluctant to sell without replacing the Chilean and their first choice is Bordeaux’s 20-year-old Brazilian forward Malcom.
Manchester City is 29-year-old Sanchez’s most probable destination.
Conversations have been held between the clubs but there is as yet no agreement on a fee.
Arsenal are thought to have asked for up to £35m, with Premier League leaders City initially suggesting they would pay around £20m. Sources anticipate a compromise of between £25m and £30m.
It is also widely reported that Manchester United will rival City’s interest and have already made a bid.
If a deal cannot be agreed, Sanchez will be able to leave when his contract expires in the summer – a situation Arsenal are keen to avoid as they would receive nothing.
The Chile international almost joined City for about £60m on the final day of the summer transfer window, only for the switch to collapse when Arsenal failed to sign Monaco and France midfielder Thomas Lemar.
‘It would be a coup for United over City’
Former Manchester United defender Phil Neville said Sanchez would be an “absolutely unbelievable signing” for the Old Trafford club.
Responding to reports that said a £25m bid had already been made, he told Sky Sports: “If you look back at Manchester United’s big signings over the decades, Eric Cantona came out of the hat, [Robin] van Persie was a surprise – and they both helped United win titles.
“I think this could have a similar impact. He’s got the character to play at Old Trafford,” the ex-England international added.
“It would be a coup, particularly for United fans, to have a player like Sanchez come to them over City. It would be a strong statement.
“It’s pretty obvious he’s not going to stay at Arsenal. I think if United were going to buy him, £25m would be an absolute snip.”