
Reports on Sunday claimed that City were closing in on the signing of the highly-rated 22-year-old after tabling a £27million bid for the Chile international.
But according to the Daily Telegraph, Spanish champions Barcelona appear to have won the race to sign Sanchez, who could move to Camp Nou in a £32m deal.
Delegations from both Manchester clubs had met with Udinese officials over the past week to try and thrash out a deal for the playmaker.
Several Serie A sides have also shown interest, including Juventus, while Chelsea have also been linked with a move for Sanchez in recent weeks.
Sanchez is currently in South America preparing for the Copa America which starts on July 1st, but is reported to have been granted permission to travel back to Europe to complete his move if necessary.
According to The People on Sunday, Man City were believed to be leading the race to sign Sanchez after promising to pay the £27m in one lump sum.
Barca and Premier League champions Man Utd were both reportedly proposing to pay the fee over a three or four year period, although based on Monday's report, the additional money on the table appears to have swung things for Pep Guardiola's side.
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