IIRC Sane himself wants Bayern. He -and his GF and family- wants to go back to Germany
Every source is reporting different things but if it was clear like that Sané would probably already be a Bayern player now. I mean Pep openly said he can leave and Bayern is working on this since May so it doesn't seem that easy.
For me it looks more like that generally he would like to stay but Pep just can't offer him what Bayern offers = starting spot and being the main guy. It's also said his family (mother especially) would like him back in Germany (even though Munich and Manchester are pretty much the same distance) while his girlfriend wants to stay in England so that doesn't make it easier.
I think he'll join Bayern in the end just because they would look like fools otherwise with how often they talk about him
But it definitely wasn't an easy task to convince him. What would be understandable considering that going from PL and Pep to BuLi and Kovac is quite a big downgrade. It'll also -as always- be about money of course, don't think City would make their currently 3rd/4th winger a huge new contract offer even though they always say they want to renew.
But no matter if it happens or not i think the only possible outcomes are joining Bayern or staying at City. Can't really see some other club like Real just jump the gun, convince the player and offer City 100+ mil in the span of just a few days (PL window closes in 1 week).