The club's general manager has revealed the forward will likely move on before next season, with two strikers to be signed to complement Karim Benzema
The Argentina striker was coy to reporters when asked about his future at the club early last month, amid suggestions that president Florentino Perez is unconvinced by his form this season
And Sanchez has now indicated the 25-year-old will be sold to allow room for two further forwards to join Karim Benzema at Santiago Bernabeu.
"In a big club like Real Madrid, it is assumed there is space for two or three high-level No.9s. It was Benzema and Higuain. Higuain will go, Benzema will stay, and two others will arrive," Sanchez was quoted as saying by Le 10 Sport.
Madrid have been linked with a move for Manchester City striker Sergio Aguero throughout the current campaign, whilst they continue to be linked with a big-money bid for Tottenham star Gareth Bale, with director of football Zinedine Zidane claiming sides are unlikely to be put off by the Welshman's hefty price-tag.
Higuain has scored 15 goals in 38 appearances in all competitions for los Blancos this season.