* Chile forward Sanchez gets iconic No. 7 shirt
* Signs 4-1/2 year contract at Old Trafford
* Mkhitaryan pens long-term deal at Arsenal (Adds more details, background)
By Simon Evans
MANCHESTER, England, Jan 22 (Reuters) - Manchester United signed Chile forward Alexis Sanchez from Arsenal in a swap deal with midfielder Henrikh Mkhitaryan after a protracted transfer saga finally ended on Monday.
The 29-year-old Sanchez, who was out of contract at Arsenal at the end of the season, has joined the Old Trafford club after local rivals Manchester City had pulled out of the race.
British media reported that Sanchez, who will wear United's iconic No. 7 shirt, has joined the club on a 4-1/2-year deal, while Arsenal announced that Armenia captain Mkhitaryan, who turned 29 on Sunday, had signed a long-term contract.
Sanchez said: "I am thrilled to be joining the biggest club in the world. The chance to play in this historic stadium and to work with Jose Mourinho was something I could not turn down.
"I am very proud to be the first Chilean player ever to play for United’s first team and I hope I can show our fans all around the world why the club wanted to bring me here."
Sanchez missed Arsenal's 4-1 win over Crystal Palace on Saturday to have a medical in Manchester on Sunday.
He would have been available on a free transfer when his contract expired in four months' time but once City baulked at the amount of money involved in a mid-season deal, United manager Mourinho urged his club to step in.
“Alexis is one of the best attacking players in the world and he will complete our very young and talented group of attacking players," said Mourinho.
"He will bring his ambition, drive and personality - qualities that make a Manchester United player and a player that makes the team stronger and the supporters proud of their club's dimension and prestige."
United are second in the domestic standings, 12 points behind Manchester City, and will hope Sanchez can help them cut the gap on their neighbours whilst also helping them progress in the Champions League, where they face Sevilla in the last 16.
Sanchez almost joined City at the end of the August transfer window but that deal fell through as Arsenal manager Arsene Wenger was unable to sign a replacement in time.
He scored 80 goals in 166 appearances after the London club paid 35 million pounds ($48.83 million) for him in July 2014, and won the FA Cup in 2015 and 2017, scoring in both finals.
Missing out on the Champions League this season was a bitter disappointment, however, followed by another blow when Chile failed to qualify for this year's World Cup finals.
A move to either of the Manchester clubs became a preferable option to signing a new contract. Arsenal wanted Mkhitaryan in exchange and he was delighted to join the London club.
Mkhitaryan had an 18-month spell at Old Trafford in which he made 39 league appearances but scored only five goals. He did score when United won last year's Europa League final and will aim to help Arsenal progress from the last 32 in that competition.
“I’m very happy that we could finish this deal and I’m very happy to be here. It’s a dream come true because I’ve always dreamed of playing for Arsenal. Now that I’m here, I’ll do my best for this club to create history,” said Mkhitaryan.
Wenger, whose side are sixth but hope for a top four finish, added: “Henrikh is a very complete player. He creates chances, he defends well, he can absorb distances and he’s very committed as well. I must say he’s a player who has all the attributes."
Mkhitaryan, who British media said had signed a 3-1/2 year contract at The Emirates, was a regular in United's first XI at the start of this season but fell out of favour under Mourinho and had started only one of their past 13 league games.
He joined United on a four-year deal in July 2016 for an undisclosed fee from Borussia Dortmund, where he had become one of the most highly regarded attacking midfielders in Europe.
Before joining Dortmund in 2013, Mkhitaryan spent four years in Donetsk, Ukraine, first with Metalurh and later with Shakhtar, whom he helped win the Ukrainian league and cup double in three successive seasons between 2011 and 2013.
He continues to be the talisman of the Armenia team and is their all-time top scorer with 25 goals from 70 games.
$1 = 0.7168 pounds Reporting by Simon Evans; Writing by Ken Ferris, addtional reporting by Steve Tongue and Matt Westby in London, Editing by Pritha Sarkar