The Germany international has emerged as a key transfer target for the Bundesliga champions, who are targeting a new winger after the exits of Franck Ribery and Arjen Robben.
Sane was named as the PFA Young Player of the Year in 2017/18, but he fell down the pecking order as Manchester City retained the Premier League title this term.
The former Schalke man was restricted to only 21 top-flight starts, although he still managed to score 10 goals and provide 10 assists.
Bayern are expected to return with a second bid having placed Sane at the top of their summer wish list.
City would prefer to keep hold of the 23-year-old but would consider selling him to Bayern if the price is right.
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