Real Madrid are reportedly lining up a move for Arsenal winger Alexis Sanchez in a potential deal that could see the Spaniards beat Manchester City to his signature.

City agreed terms with the Gunners for the Chilean's transfer in the summer, but the move fell through after Arsene Wenger's side failed to land Monaco's Thomas Lemar.

Pep Guardiola remains interested in signing Sanchez, but according to Don Balon, City will face competition from Real Madrid, who are reportedly looking to seal a return to La Liga for the winger.

Sanchez, who played for Barcelona before moving to the Emirates, is keen to move back to Spain, according to the source, which adds that Madrid club president Florentino Perez is an admirer of the 29-year-old.

The Chilean has returned to form for Arsenal and starred with a brace of goals in the Gunners' 3-2 defeat of Crystal Palace on Thursday.