A day after interim coach Chris Greenacre ruled himself out of applying for the role, Sanchez has emerged as a candidate to fill the position created by Ricki Herbert's resignation on Feb. 26.
Sanchez's glittering playing career included 207 goals in 287 appearances for La Liga giant Real Madrid, as well as stints with city rival Atletico Madrid and several clubs in his homeland.
The European Golden Boot winner in 1989-90, he turned to management after his playing retirement, spending time at the helm of the Mexico national team and then-La Liga club Almeria.
Sanchez's last role was a short stint with Mexican outfit Pachuca, which ended in November.
Goal Australia understands Australian-based agency ETI Sports Management are handling Sanchez's A-League interests.
Wellington Phoenix general manager David Dome declined to confirm if Sanchez had applied for the role, stating that the process to fill the position would be confidential.
A character known for his eccentricities and volatility, the 54-year-old has nonetheless proved his coaching mettle by winning titles in Mexico and saving Almeria from relegation from La Liga in the 2009-10 campaign.
Sanchez is one of the highest-profile names linked to the Phoenix role, with the likes of highly rated Central Coast Mariners assistant coach Phil Moss also believed to be in the running.