Manchester City are keeping tabs on the contract negotiations between Alexis Sanchez and Arsenal as the forward has yet to come to an agreement with the club over a new deal.

Sanchez, who has one year left on his current contract with the club, has been in talks with Arsenal since August but there have been no signs indicating that a deal will be struck between the pair anytime soon.

Buoyed by his form this season, the Gunners are desperate to tie the Chile international down to a new deal and are prepared to award Sanchez with a considerable pay rise in order to do so.

Sanchez is currently earning £130,000-a-week at the Emirates but a new contract would make him Arsenal’s highest paid player outright ahead of Mesut Ozil.

However, the club are yet to confirm any indication that a deal will be signed alerting the attention of Premier League rivals, Manchester City.

If Sanchez rejects Arsenal’s attempts to keep him at the club for longer, then the club face the possibility of letting him leave North London on a free transfer in 2018.

The situation casts an uncanny resemblance to the Robin Van Persie transfer saga in 2012 where Arsenal were left with no choice but to sell the forward to Manchester United to rule out any risk of losing him on a free move a year later.

The Sunday Mirror understands that City and Juventus are the two clubs who are most likely to make an approach for the Arsenal striker for a figure reportedly in the region of £50million.

Sanchez is in demand across Europe following his electric start to the season (Arsenal FC via Getty Images)

Pep Guardiola signed Sanchez for Barcelona five years ago and could look to boost his attacking options at Eastlands by trying to sign him for a second time with his new club.

Sanchez has been favoured over Olivier Giroud as Arsenal’s first choice centre forward this season by Arsene Wenger and he has repaid the Frenchman’s faith with a superb start to the campaign.