It is believed that Moutinho is bent on snatching the Chilean winger for £25 million. The deal is likely to be complicated by other major clubs who have impressed interest, among which Bayern Munich, Paris Saint Germain and Manchester City.
The Citizens were in contention for Sanchez’s signature in the closing moments of the summer transfer window, but saw their £60 million bid rejected by Arsenal who opted to keep their star for another year.
The Chilean has recently returned from holiday and is deemed still 'not ready' for the new season.
Sanchez is yet to add to his tally of 73 goals in 147 matches for Arsenal as he has not scored yet in the Premier League this season.
The Gunners are believed to have surrendered to be possibility of losing their star man, and would be open to bids for him in January.
MORE: You can find a full list of transfer rumours and gossip here.