According to Manchester Evening News, the Chilean international had doubts with the former Barcelona and Bayern Munich manager's rotation policy in the attacking division at the Etihad.
Guardiola has the services of Gabriel Jesus, Sergio Aguero, Leroy Sane, Raheem Sterling and Bernardo Silva as the first choice players in the attacking position. The Portuguese international arrived from AS Monaco last summer and has not featured regularly this term.
However, the rest of the above mentioned players have been widely used by the Catalan manager in all competitions. Jesus, Aguero, Sterling and Sane have collectively scored 42 goals and registered 20 assists in the Premier League this season.
Sanchez can play as a centre forward or on the wide positions, which has been widely used by Sane and Sterling at City this season. Barring the former Monaco attacker, the rest of the attacking players have impressed for the Premier League leaders this season.
He came close to joining City on the deadline day of the last summer transfer window. The Gunners' failure to sign a replacement resulted in the deal to collapse. He continued to be linked with a move to the Etihad as he had less than a year left on his contract.
The former Barcelona forward was all but set to reunite with Guardiola at City, either in January this year or as a free agent in the summer, but their manager's rotation policy meant that Sanchez will not be assured a regular playing time at the Etihad.
This allowed Manchester United to join the race in signing the Gunners contract rebel and are now the firm favourites to secure his services. Sanchez is likely to be featuring regularly under Jose Mourinho and is expected be the Portuguese tactician's first signing of the January transfer window.
According to the report, Jose Mourinho's side are closing in on completing the deal for the South American forward in the mid-season transfer window. United have offered Armenian international Henrikh Mkhitaryan to Arsenal as a part of the deal that will see them sign Sanchez.
Sky Sports claim Sanchez will earn more than £18m-a-year at United, which will be in excess of £350,000-a-week. The Red Devils are also ready to pay £5m to the Chilean's agent Fernando Felicevich as a part of the deal.