Sanchez was left out of Arsenal’s shock FA Cup loss at Nottingham Forest meaning he would be eligible to feature in the competition for City.
And as he has not played in the Champions League this season, Uefa regulations would allow him to take part in City’s campaign.
Arsenal manager Arsene Wenger astonishingly admitted that Sanchez’s future was “not my problem”.
He said: “I don’t know what is going on in his head and whether he is with us short term or long term.
“I am not a psychologist.”
Speaking before the Gunners’ 1-1 draw at West Brom, the Frenchman added: “From Monday he is free to go where he wants if it’s a foreign club — but that’s not my problem.
“My problem is just about trying to win the game at West Brom.”