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Sanchez, was close to joining Manchester City from Arsenal in the summer transfer window.
Pep Guardiola's side made a deadline day bid totalling £60m, which the Gunners accepted.
However, Arsenal blocked Alexis Sanchez's proposed move to the Etihad at the last minute after they failed to land Monaco winger Thomas Lemar.
The Chile international has less than ten months remaining on his current contract at the Emirates.
He has already rejected a new and improved £300,000-a-week deal to remain at the club as he is demanding closer to £400,000-a-week.
However, the former Barcelona man looks destined to leave on a free transfer as it appears he has no intention of putting pen to paper on fresh terms in north London.
And The Sun say Manchester City will now be reluctant pay anymore than £20m for Sanchez when the transfer window reopens in January.
It is said this is because he will have just six months remaining on his contract at Arsenal, so City are determined to not pay over the odds for him.
Despite this, City remain confident of reuniting Sanchez with Guardiola - with the manager himself refusing to rule out a move for him last month.
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