Chile forward Sanchez, 29, has signed a four-and-a-half-year deal with Manchester United worth £14m a year after tax.
Mkhitaryan, 29, moves in the opposite direction to Sanchez after scoring 13 goals in 63 appearances for United.
The Armenia international moved to Old Trafford from Borussia Dortmund for £26.3m in July 2016.
He has made only 10 Premier League starts this season, and it is understood there was a breakdown in trust between him and Mourinho.
United's new signing Sanchez, will wear the iconic number seven shirt, this was announced on the club's Twitter account with him playing 'Glory, Glory Man Utd' on a piano.
Sanchez scored 80 times for Arsenal since joining from Barcelona for £30m in July 2014, and was last season's top scorer with 30 goals in all competitions.
After signing his contract, Alexis said "I am thrilled to be joining the biggest club in the world," said Sanchez. "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."
United's manager Jose Mourinho described Alexis as one of the best attacking forwards "Alexis is one of the best attacking players in the world and he will complete our very young and talented group of attacking players.
"He will bring his ambition, drive and personality - qualities that make a Manchester United player."
Mkhitaryan on the other scored 1 goal and assisted 5 in 15 premier league matches this season.
He will be available to play in Arsenal's Premier League game at Swansea on 30 January as he is cup-tied for the club's Carabao Cup semi-final second leg against Chelsea on Wednesday.
"I'm very happy that we could finish this deal," said Mkhitaryan. "It's a dream come true because I've always dreamed of playing for Arsenal. Now I'm here, I'll do my best for this club to create history."
Mkhitaryan made a modest start to his United career and did not start a Premier League game in almost three months after he was substituted at half-time during his full debut against Manchester City.
Yet his form improved during the second half of last season and he scored as United beat Ajax in the Europa League final in Stockholm in May.
But, in November, Mourinho said Mkhitaryan's performances had been "decreasing step by step".
Before he moved to Old Trafford, the Armenia captain was the 2015-16 Bundesliga player of the season, and scored 23 goals in all competitions.
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