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The England forward moved to Stamford Bridge on loan last summer after his relationship with former United manager Erik ten Hag broke down.
United, who signed Sancho for £73m from Borussia Dortmund in 2021, are happy for the 25-year-old to leave.
Chelsea did not pay a loan fee for the player and covered just half of his reported £300,000-a-week wages.
The Blues had agreed an obligation to buy Sancho for a fee of about 25m if they finished higher than 14th in the Premier League, which they did - or pay to get out of the deal.
However, the club and the player's representatives have not been able to agree on a contract for Sancho, who would have had to take a pay cut from his deal at United.
The England player has a year remaining on his United contract, and the club still owe £17m to Dortmund.
Sancho scored in the 4-1 win over Real Betis on Wednesday to help Chelsea win the Conference League - their first trophy since February 2022 - and ended the season with five goals and 10 assists in 42 games.
Although he is under contract until 30 June at Chelsea, he is unlikely to play for them in this month's Club World Cup in the United States.
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