Despite already having a world-class forward line, Pep Guardiola is determined to add Sanchez to his pacey attack. City have already scored the most goals in the Premier League this season.
If the Chilean does swap the Emirates for the Etihad, question marks would be raised over Aguero's future at the club - and it was understood that Guardiola was happy to let the prolific striker leave this summer.
Aguero, a target for Italian giants AC Milan, has made a blistering start to life this season, scoring seven goals in eight games for City in England's top flight.
However, he faces a spell on the sidelines after breaking a rib in a car accident in Amsterdam at the end of last month.
Sanchez is reportedly desperate to leave the Gunners after they failed the qualify for the Champions League or mount a serious Premier League title challenge last season.
It is no secret that the 28-year-old is yet to sign a new contract with Arsenal, and he has no desire to do so, meaning he can leave on a free transfer next summer.
Arsene Wenger did not let him leave for City on deadline day after the North London club failed to sign Thomas Lemar from French champions Monaco, but Guardiola remains confident he can bring Sanchez to the Etihad.