Alexis Sanchez will waive a £25million signing-on fee to sign for Man City this summerAFP or licensors
And much of the runaway Premier League leaders’ opening offer would have gone in Sanchez’s pocket had the deal been done at the end of the season — when he will be a free agent.
The Gunners still feel they can get £35m and are reluctant to sell until they have found a replacement.
But both Man City and Sanchez, 29, are now optimistic a deal can be done during the current transfer window.
The wrangling over the fee may not be the only battle between the two Premier League giants this month.
Alexis Sanchez is out of contract in the summer and wants to link up with Pep GuardiolaGetty Images - GettyManchester City boss Pep Guardiola is desperate to land Alexis Sanchez this monthReuters
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They are set to go head-to-head over the signing of West Brom defender Jonny Evans, 30.
Guardiola’s need for a new striker has become more pressing since Gabriel Jesus suffered a knee injury last month.
The Brazilian is heading back to see specialist Dr Ramon Cugat in Barcelona this week amid fears it could be worse than initially feared.
City insist it is just a scheduled visit to Spain — despite reports suggesting he may have ruptured his cruciate.
Manchester City are also interested in signing West Brom ace Jonny EvansReuters
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Paris Saint-Germain and Bayern Munich have also shown interest in Sanchez but he looks set on a reunion with his old Barcelona coach Guardiola.
Meanwhile, West Brom want around £25m for Evans. Arsenal have shown the biggest interest and would throw in Mathieu Debuchy in part-exchange.
But former Manchester United defender Evans would prefer to keep his family in the North West and also get Champions League football with City.
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