Brazilian Gabriel Jesus has hit a rich vein of form since the Gunners' interest surfaced. He has scored six goals in his last three matches in all competitions, including one in the 4-0 win over Leeds on Saturday which took Pep Guardiola's side back to the top of the Premier League.
Jesus' lack of starts this season has led to him potentially seeking an exit but he has now started four of the club's last five matches. But with his contract running down, City have had to come up with a price they would accept this summer if he does not pen a new deal.
And the Mirror claims the figure decided upon is around £40m.
Raheem Sterling could also be sold, with both players potentially bringing in over £100m to the Etihad club.
City are heavy favourites to sign Borussia Dortmund striker Erling Haaland, so Jesus' game time could be further reduced if he does stay. Meanwhile, Arsenal are in desperate need of at least one new forward.
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