Sanchez, who came close to joining Manchester City last summer, could earn as much as £500,000 a week at Old Trafford.

Wenger admitted Arsenal cannot compete financially with their Premier League rivals and he thinks the salaries are only going one way.

Asked if he could see a player earning £1million a week, the Frenchman replied: "How many weeks do you have in a year, 52. You cannot rule anything out.

"Who was the first player who was a £1million transfer? Trevor Francis (in 1979). Today it looks ridiculous."

Wenger pointed to the example of Robin van Persie, the last big name to leave the Emirates Stadium for Manchester United, as someone who would not extend his deal with the club and was looking to move elsewhere.

"Maybe it was the first case where the big players," he said.

"Van Persie was one of the first cases where a big player didn't extend his contract and came close to the end of his contract. That will happen more and more.

"Because we arrive to a level where the money at stake for players who are free is so big, and the transfers are so big, that the players think 'it's better I go to the end of my contract, and if I don't get the whole integrity of the transfer now, if I get only half, it's a huge amount of money'."

Henrikh Mkhitaryan will move the other way as part of the Sanchez deal with Wenger insisting his contract demands would not be an issue for the Gunners.

“Yes, financially yes," he conceded when asked whether Arsenal could offer less than their rivals.

"That doesn't mean that you cannot compete on the pitch. That will not be an excuse big enough to not compete on the pitch. Of course, there's no mystery that United and City have bigger financial resources. We did the maximum we could afford to do (with a contract offer for Sanchez)."

With Wenger now expected to lose another star player, he admitted Arsenal's scouting policy may have to change if they are to find fresh talent, having already signed promising Greek defender Konstantinos Mavropanos this month.

"Yes, of course," he said when asked if the club now has to be more creative in the transfer market.

"We have to revisit the way we structure our club, and our scouting policy.

"You look at world-class players now, you look at Cristiano Ronaldo, Neymar, Sanchez, their level of financial demands and the level of their costs, you have to go younger and certainly these players are not affordable.

"That is more difficult nowadays because the competition is everywhere, it is very big. What is important today is that we are the club that can maybe give them a chance, more than many other clubs."