Manchester United has reportedly lodged a stunning $A42.8 million bid for Chilean star Alexis Sanchez as it attempts to sign the 29 year-old ahead of city rival Manchester City.

Pep Guadiola's team is understood to have a $A34 million offer on the table, having been linked with the star throughout the season. 

Arsenal is believed to be keen to recoup some money during the January transfer window for Sanchez, whose deal runs out at the end of the season, placing him in a position to leave for free at the completion of the Gunners' campaign.

It was widely assumed the dynamic forward would link up with Guardiola, for whom he excelled at Barcelona in 2011-2012. That season Sanchez played across the Blaugrana's star-studded forward line and he is considered a natural replacement at City for the injured Gabriel Jesus. 

According to a report in the Guardian, United has sought to sensationally trump its rival with a higher bid for the player. 

More to come