Alexis Sanchez will be staying at Arsenal despite a £60m bid from Manchester City, according to Sky sources.
Sanchez is in the last year of his contract and Sky Sports News understands City offered £55m plus £5m in add-ons.
However, the Chile international will be remaining with Arsenal after the London club failed to sign Thomas Lemar from Monaco on Deadline Day.
The future of Sanchez has been one of the transfer sagas of the summer but, despite the fact they have been unable to agree a contract extension with the 28-year-old, Arsenal have consistently said that they want to retain their prized forward as they bid to secure a return to the Champions League.
City launched a second bid for the player on Thursday but we reported earlier in the day that the Gunners would not accept a cash offer for Sanchez, having already sold Alex Oxlade-Chamberlain to Liverpool for a fee understood to be £35m.
There was a further twist on Thursday afternoon when Arsenal tabled a £92m bid for Lemar, a deal which may have opened the door to a Sanchez move.
However, the Lemar deal subsequently fell through and we understand that Arsenal are delighted that Sanchez is staying at the club.
Arsenal’s position was always that they would only sell Sanchez if they could sign a high-calibre replacement and they are pleased with their summer business.
However, the likelihood is that Sanchez will now leave Arsenal on a free contract next summer.
Formerly with Barcelona, Sanchez joined Arsenal in the summer of 2014 and has proved to be a superb signing.
The Gunners have won the FA Cup twice since his arrival, with the forward scoring in both of the finals, but they have been less successful in the Premier League and failed to qualify for the Champions League last season.