Sanchez, 29, has been a star for Arsenal since his 2014 move from Barcelona, notching 80 goals in 165 games for the Gunners whilst becoming a favourite at the Emirates Stadium.
However, the Chilean may be on his way out of the club this month, given that his contract expires at the end of the season, and Arsenal could cash in now rather than lose him for nothing this summer.
Manchester City had long been expected to tie up the signing of Sanchez, but The Guardian now report that Manchester Untied have submitted a rival bid.
It's claimed that whilst City have offered £20million for Sanchez, United have now come in with £25million for the forward, as well as offering him bigger wages as they offer greater terms on two fronts.
The report notes that United boss Jose Mourinho is confident of sealing a deal for Sanchez, despite the fact that the Arsenal star has a strong relationship with City manager Pep Guardiola.
Guardiola and Sanchez worked together at Barcelona and had been expected to reunite at the Etihad Stadium, but United may now be prepared to hijack that move.
It's also added that Arsenal have been offered United playmaker Henrikh Mkhitaryan as a possible sweetener in the deal, but his £200,000-a-week wages are a problem, with the latest reports meaning Sanchez's potential Arsenal exit just became even more fascinating.