Bayern are reported to be readying an €80 million (£70.5m) bid for Germany international Sane.
The 23-year-old scored 10 goals and supplied as many assists as City defended their Premier League title as part of a domestic treble this season, including strikes in the pivotal wins over Liverpool and Manchester United.
But Pep Guardiola frequently left Sane on the bench during the closing weeks of the campaign, preferring Raheem Sterling and Bernardo Silva as his first-choice wide attackers.
A spell out of favour evoked memories of the player's shock omission from Germany's 2018 World Cup squad, although Low has since brought Sane back into the fold and believes a switch to Bayern could be beneficial for all parties.
Speaking at the Sport Bild 100 summit, Low said: "If the transfer happened it would be a good story for him, for Bayern, for the national team and for the Bundesliga."
The Germany boss recently made the controversial decision to call time on the international careers of three Bayern players - Thomas Muller, Mats Hummels and Jerome Boateng - following Die Mannschaft's group-stage World Cup exit and their relegation from their Nations League group.
Later at the same event, Bayern chairman Karl-Heinz Rummenigge suggested Bayern would press to bring in Sane – as they did three years ago when he joined City from Schalke for a reported initial fee of £37m.
Thank you guys https://t.co/JZ5nMX2Cx8— Leroy Sané (@LeroySane19) May 12, 2019
Rummenigge went on to state that the departure of veteran wingers and club greats Arjen Robben and Franck Ribery creates an opening Sane would not have enjoyed when he left Schalke.
Sane would be the fourth addition Bayern have added this summer after French defenders Lucas Hernandez and Benjamin Pavard and 19-year-old German striker Jann-Fiete Arp.
Previously, Bayern had shown an interest in Chelsea winger Callum Hudson-Odoi, but the teenager's ruptured Achilles may have put any interest on hold.
The Bundesliga giants have already clinched their seventh straight league title and will be looking to secure a domestic double when they face RB Leipzig in the DFB-Pokal final Saturday.