The Bundesliga champions had made the Manchester City man their leading transfer target as they seek replacements for departed wing duo Franck Ribery and Arjen Robben.
However, Sane suffered a knee injury during last weekend's Community Shield clash with Liverpool and could be out of action until March.
And Bayern are now set to turn their attention to Bale, who could still leave Real Madrid before the European transfer window closes on September 2.
Madrid pulled the plug on Bale's proposed move to the Chinese Super League last month.
However, they may now be willing to sanction his departure in order to free up funds for their pursuit of PSG forward Neymar.
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