Just days after beating Chelsea to win the FA Cup, Arsenal face the increasing prospect of losing two of their most important players this summer.
Arsenal have been attempting to convince Sanchez and Ozil to commit their long-term future for at least a year.
Express Sport understands the club are ready to pay as much as £300,000-a-week to keep them.
But no agreement has been reached with the duo and they are now entering the final year of their contract.
Rival fans react as Arsene Wenger agrees new two-year Arsenal deal Tue, May 30, 2017
Arsene Wenger has agreed a new two-year deal at Arsenal and rival fans are delighted!
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According to The Times, Sanchez wants to join Bayern Munich where he would link up with compatriot Arturo Vidal.
While Ozil is ready to run his contract down and leave next summer on a free transfer.
Sanchez and Ozil are said to have reservations about Arsenal's chances of competing for major honours after finishing fifth in the Premier League and failing to qualify for the Champions League for the first time in 20 years.
Alexis Sanchez and Mesut Ozil to leave Arsenal
The news will come as a huge blow to Arsenal and Wenger, with an announcement expected today to confirm the Frenchman's new deal.
Wenger held talks with majority shareholder Stan Kroenke on Monday and then met with the board yesterday to ratify the contract.
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