Alexis remains determined to join City and the Gunners are now receptive to the idea of selling the Chilean, having previously refused to entertain any offers throughout the summer.
Raheem Sterling is one of several options that has been mooted during negotations between the two clubs in the past 48 hours, though Goal understands it is the Gunners who have pushed for his inclusion.
Sources have told Goal that Fabian Delph has also been proposed by City as the Premier League rivals aim to thrash out a mutually benefical agreement before the transfer window shuts on Thursday.
There have also been reports elsewhere in the media that the Gunners have floated the idea of including Sergio Aguero in the deal, though sources close to the player insist the Argentine has no desire to make the move.
While Alexis has long since agreed personal terms with City, Arsenal would have to swiftly reach an agreement with any potential makeweight, meaning a cash-only deal remains a distinct possibility and indeed the most likely outcome.
City officials are hopeful of making two signings before Thursday's deadline and there is also confidence that they will tie up a move for West Brom's Jonny Evans, despite rumoured rival interest from Arsenal themselves.
The Baggies are holding out for around £30 million for the Northern Ireland international, though City may try to use Eliaquim Mangala to bring the price down.
If the Frenchman does not want to make the move to the Hawthorns, City are likely to offer a flat fee of around £25m plus a series of bonuses and add-ons.
City agreed personal terms with Evans earlier in August but have so far had two bids rejected by the Midlands club, while Leicester City are also interested.
A dramatic change in City's transfer plans has led to their pursuit of Evans, though Alexis has been a priority target for several months, and indeed City have been supremely confident of signing him since April.
The forward told Chile team-mates towards that end of last season that he wanted to reunite with Guardiola, with whom he worked at Barcelona, and then agreed personal terms with the Blues during the summer.
Having concluded the Confederations Cup, where he revealed he had made up his mind about his future, he informed Arsenal he wanted to move to the Etihad Stadium and would not sign a new deal with the Londoners.
Sources close to City have been surprised by Arsene Wenger's shere refusal to strike a deal throughout July and into August, although there had been a suggestion that the Frenchman was merely delaying the inevitable as long as possible, so as to deprive Pep Guardiola of the Chilean's services for the opening games of the season.
City and Arsenal finally opened talks over the weekend and although a Gunners spokeman has told Goal that an official offer has yet to be made, the Blues are hopeful they will manage to conclude a deal soon, despite the fact Alexis is in Chile ahead of World Cup qualifiers against Paraguay and Bolivia.
He is said to have requested time off from preparations ahead of Thursday's game, and sources close to the player have told Goal he is confident he will finally become a City player in the coming days