The 26-year-old has enjoyed an impressive 2020-21 campaign for City, contributing 14 goals and 12 assists across all competitions.
However, Sterling was unable to nail down a regular spot at the European season, with Phil Foden regularly preferred ahead of him.
According to The Sun, Arsenal are aiming to land the England international as they look to bolster their attack.
The Gunners are prepared to meet Sterling’s £300,000-a-week wages, and are at the head of the queue to sign him this summer.
Tottenham Hotspur have also been linked with the Englishman. Unlike Arsenal, they are reluctant to meet his hefty salary package.