Villa have made it clear that Grealish is not for sale and they would not be tempted to sell for anything under £80m.
A number of clubs are willing to pay between £50m and £60m but Villa would not be interested in doing a deal at that level.
Arsenal's summer transfer budget has been hit by their failure to qualify for the Champions league and the ongoing financial uncertainty caused by the coronavirus pandemic.
Grealish has three years left on his contract and Villa want him to stay as they seek to establish themselves as a Premier League club.
Villa may have been forced to sell Grealish if they had been relegated but his goal in the 1-1 draw at West Ham on Sunday kept them in the Premier League.
He could be in contention for an England starting spot at next summer's European Championships if he continues to play every week, which is almost certain under Dean Smith.
Discussions for Sancho centre around the transfer fee and structure of payments. It is understood personal terms will not be an issue.
Coupled with Villa's £80m asking price, there are doubts at Old Trafford about how Grealish would fit into the current Manchester United side.
Aston Villa boss Dean Smith joked Grealish's immediate plans are to get drunk, rather than discuss his future, as the club secured their Premier League status on Sunday.
Asked about Grealish's future, Smith said: "He goes out and gets drunk with me now!"
He later added: "We've got billionaire owners and he'd cost a lot, a lot of money." บอลวันนี้ทุกลีก
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