Arsene Wenger has made it clear Sanchez will not be leaving Arsenal this summer despite rumours linking the Chile international with an exit and his contract running out in a year.
Manchester City were understood to be favourites with Pep Guardiola keen for a reunion with a player he knew from his days at Barcelona.
But Arsenal are adament against selling to a Premier League rival.
And The Mirror claim Sanchez is resigned to remaining at the Emirates for at least one more season.
It is reported the 28-year-old has told friends he will see out the remainder of his contract at Arsenal before looking for a more lucrative contract next summer.
Sanchez is understood to want roughly £400,000-a-week in wages and the Gunners are not prepared to meet his demands and offer him a new contract.
Bayern Munich were reportedly considering a move for Sanchez, but they too were put off his high wage demands.
Sanchez only returned to pre-season training last Tursday following his involvement in the Confederations Cup and wasn't involved in the Community Shield win over Chelsea yesterday.
But he was present at Wembley to watch his team-mates beat the reigning Premier League champions on penalties.
