Carlo Ancelotti confirms Bayern Munich interest in Arsenal's Alexis Sanchez

However, the Bayern manager added that the club would not pay 'crazy money' for the Chilean

Sanchez has been linked with a move away from Arsenal (Getty)

Carlo Ancelotti has confirmed Bayern Munich’s interest in Arsenal forward Alexis Sanchez, but insisted that the club will not pay “crazy money” to prise the Chilean away from the Emirates.

Sanchez, who is currently on duty with Chile for the Confederations Cup, has refused to sign a new deal at Arsenal and is out of contract next summer as talks over an extension continue to stall.

As such, the player has been heavily linked with a move away from north London, with both Bayern Munich and Manchester City touted as potential destinations.

Despite reports suggesting that the Bundesliga champions had dropped their interest in Sanchez, Ancelotti has seemingly opened the door to a summer raid for the 28-year-old.

When asked about the reports linking Sanchez to the Allianz Arena, Ancelotti said: "If an opportunity comes up, the club will be ready. There are lots of rumours. Alexis is a great player but not the only one in the world. I like Alexis.

"There are possibilities in the transfer market, which can be in many direction. I believe that the market is currently somewhat crazy - and Bayern is not a crazy club.

"I know the culture of this club and will not ask for any players for whom the club has to spend crazy sums, but if there are opportunities, why not?"

Sanchez admitted on Friday that a decision has been made on his future but stopped short of confirming what his next move would be.

"Yes it's clear, but I can't tell you,” the forward said ahead of Chile’s Confederations Cup final against Germany.

Sanchez has just one year remaining on his current contract at Arsenal (Getty)

Arsenal boss Arsene Wenger has said Sanchez will not be allowed to leave this summer and he would rather see the player leave on a free transfer at the end of his contract next year.

The club's record signing, Mesut Ozil, is in the same position with reports last season claiming the pair want parity with the Premier League's top earners before signing fresh terms.