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Etihad bosses want to land Sanchez in this month's transfer window instead of waiting until the summer following an injury to Gabriel Jesus.
Chairman Khaldoon Al-Mubarak has opened talks with Arsenal about a fee and the top flight rivals are now haggling over a price for the Chilean international.
City are reluctant to pay more than £20m for someone who will be a free agent in the summer when his contract expires.
The Gunners know selling Sanchez in this window will cause outrage with fans and are holding out for around £30m.
Sanchez has made it clear he wants to join City and play for Pep Guardiola, rather than go to Paris St-Germain.
City are willing to hand Sanchez a long-term deal worth £275,000-a-week with bonuses on top, to make him one of the highest paid stars in the Premier League.
How Manchester City could line-up if they sign Alexis Sanchez
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“But when he comes he will add something to the team”
Kevin De Bruyne
De Bruyne reckons Sanchez would be a huge success at City and has let slip that it is now a case of 'when' he arrives at the Etihad and not 'if'.
The Belgium superstar revealed: "He's a very good player. Obviously we will see what happens in this transfer period.
"We (the players) don't have to take care about that anyway. If a good player comes to us that is better, if he doesn't come we do it with the team we have.
"We are in a good period already, the whole season and everybody is doing a good job, but when he comes he will add something to the team."
De Bruyne, meanwhile, has revealed he is still waiting for Etihad bosses to offer him a new contract.
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Guardiola is keen for De Bruyne to be rewarded with improved terms following his stunning progress this season to become one of the best in the world.
The midfielder is expected to double his current wages of £110,000-a-week, but admits nothing has been agreed.
He added: "We are still in negotiations. I am waiting for an offer from the club but my agent has been on holiday for three weeks.
"There is nothing really new at the moment. I'm not in a hurry. I still have three-and-a-half years on the contract I have.
"I cannot complain for the moment. Obviously we will see what happens. Negotiations are going good, but they are going quietly. That is the way I think it should be."