Arsenal are prepared to offer Sanchez as much as £300,000-a-week to extend his stay at the club, the Express reports.
The striker is entering the final 12 months of his current deal and speculation has been mounting over a summer move for the Chilean.
Chelsea, Manchester City, Juventus and Bayern Munich are all rumoured to be keen on the forward who has netted 22 times in all competitions this season.
It appears Arsenal are willing to smash through their wage bracket in an desperate attempt to maintain Sanchez’s services. The new contract would make the forward the highest paid player in the Premier League.
Conceding the 28 year-old to a domestic rival would be particularly hard to take for Arsenal fans.
Despite Sanchez’s impressive form this season, the Gunners have struggled. Arsenal have lost five out of their last eight matches, including conceding three goals in each of their last four away games.