Bayern Munich have pulled out of the race to sign Alexis Sanchez - leaving Manchester City as his only escape route from Arsenal.
The Chilean star has been linked with Bayern this summer after failing to sign a new deal in north London.
Carlo Ancelotti admitted Sanchez's wage demands made a move unlikely, with the German champions signing James Rodriguez on loan last week.
Bayern CEO Karl-Heinz Rummenigge has now confirmed their pursuit is over.
"I don't know what [Sanchez] has said but we are no longer involved," said Rummenigge.
"We are in agreement with the coach [Carlo Ancelotti] and we won't be doing another deal for an attacker. That makes no sense."
Rummenigge's admission gives City a free run at Sanchez, should he leave Arsenal this summer.
Just last week, he admitted he wanted to play in the Champions League next season - and is waiting to hear back from the Gunners.
However, Arsenal remain confident they can persuade Sanchez to stay in north London.
They are determined not to sell to a Premier League rival this summer and believe the saga will come down to money.
Boss Wenger insists he has had “positive” messages from the 28-year-old about his future, and the Gunners may let him go into the final year of his contract.