"Basically, he (Sanchez) wants to stay at the club and it's down to finding an agreement with his agent," Wenger told reporters on Friday. "The players first have to see if they are happy at the club, then they have to find an agreement."
Arsenal, fifth in the Premier League, are in danger of missing out on Champions League qualification and the 28-year-old Sanchez has been linked with a number of other clubs, including Chelsea, Manchester United and Paris St Germain.
Wenger himself is out of contract at the end of the season, but once again refused to clarify his future as he focussed on Monday's away game at Crystal Palace.
The Frenchman did, however, defend midfielder Mesut Ozil -- another player whose future is the subject of uncertainty -- saying Arsenal's crushing Champions League exit at the hands of Bayern Munich had hurt the player.
"(Ozil) is very ambitious. He wants to win the Champions League. We went out in such an emphatic way, it was difficult to take for everybody," Wenger said.
"He cares and people often reproach him because of his style of play, but he cares much more than people think he does."
Ozil has been criticised for a series of anonymous displays in recent months but impressed in Wednesday's 3-0 win over West Ham United -- Arsenal's second victory in seven league games.
Arsenal are four points behind fourth-placed Manchester City, having played a game less, and six points behind third-placed Liverpool who have played two games more.
"We are in a position that is not comfortable. It is not where we want to be. We know what we need to do," Wenger said.
"The line of conduct is very clear. We had a hiccup in recent weeks, what is important is to move on."
(Writing by Simon Jennings in Bengaluru; editing by Martyn Herman)
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