Sagna agreement not close, says Wenger
The France international is out of contract at the end of the current campaign with reports this week suggesting he is set to put pen to paper.
However, Wenger denied such speculation on Friday, stating: "No, he is not close to signing (a new deal).
"It is an ongoing process."
Wenger's side host Liverpool in the FA Cup on Sunday as they look to pick up their first win in three matches.
However, they will be without the ill Santi Cazorla, who joins Aaron Ramsey on the sidelines, although Mathieu Flamini returns from suspension for Wenger's side.
The Frenchman remains keen to pick up a result, not only to progress in the Cup, but also to boost his players as they challenge for the Premier League title.
"We have no Aaron Ramsey and Santi Cazorla, so Flamini is very welcome back," the manager added.
"I will play a team with a good chance to qualify. Will I rest one or two players? I don't know yet.
"I have the same level of confidence in every player in my squad. It's a short but very level squad.
"The results in any competition can have an influence (on the title race). The fact we play against a Premier League team will help a lot.
"If you declare yourself not in the title race, you cannot lose it. But I say yes, we are in it."