According to reports in the Sun, United chief executive David Gill himself has flown down to Spain to try to wrap up a £27million transfer for the 22-year-old Chilean.
Gill met with Udinese president Gino Pozzo on Tuesday in Barcelona to discuss the fine print of the deal.
This latest development will frustrate the Citizens, who were under the impression that their willingness to splash the cash would seal the deal.
The player's agent, Fernando Felicevich said: "An agreement with City? Sanchez's future is still very much wide open.
"We are working on it and, after meetings with City, we have other new appointments."
So far this summer, Manchester United have already earmarked £55 million to acquire Ashley Young from Aston Villa and Phil Jones from Blackburn Rovers, and are expected to snap up Atletico Madrid custodian David de Gea.
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