The club have chosen the cost of seeking after the 29-year-old would be restrictively costly.
Manager Pep Guardiola, the club's proprietor Khaldoon al Mubarak and other senior authorities are all in assention.
It is clear that the wages being requested by Sanchez would have put him in front of all City's star men, something the club chose they would not do.
Manchester United are top picks to sign the Chile worldwide in the wake of demonstrating they will meet the Gunners' £35m approaching cost for the forward.
Sources with information of the circumstance say they comprehend Chelsea are additionally inspired by the player.
They assert the general bundle being arranged is higher than the £60m for which Arsenal consented to pitch Sanchez to City in the late spring.
City still trust Sanchez would want to go along with them, given his past association with Guardiola and the reality he pushed to go along with them in the late spring.
Notwithstanding, they see it as exceptionally improbable Sanchez will drop his money related requests to a level that would enable them to continue talks.
Talking after his side's 3-0 triumph over Stoke on Monday night, United supervisor Jose Mourinho stated: "There is no news on Sanchez. He is an Arsenal player; on the off chance that he remains it's incredible for Arsenal, in the event that he comes to us, extraordinary for us, on the off chance that he goes to another club, awesome for them.
"There are presumably different clubs additionally intrigued and attempting and I shouldn't discuss a player who is an Arsenal player."