Jane Slater of the NFL Network reported the update and noted Sanders, who spends the offseason training in Dallas, is "equally interested" in the Cowboys.
The Niners acquired the 33-year-old Texas native in an October trade with the Denver Broncos. He recorded 36 catches for 502 yards and three touchdowns in 10 games. He also tallied five grabs for 38 yards in the team's Super Bowl loss to the Kansas City Chiefs.
A reunion with San Francisco appears unlikely based on a Twitter post by Sanders last week stating there's been no discussions with the franchise about an extension:
The two-time Pro Bowl selection's production has dipped in recent seasons after a three-year stretch with the Denver Broncos starting in 2014 when he recorded at least 70 catches and 1,000 yards in every campaign. He's remained a reliable secondary contributor, though.
That makes him an ideal fit for the Cowboys, who just agreed to give fellow wideout Amari Cooper a five-year, $100 million contract to serve as their top target.
Cooper, Sanders and Michael Gallup would represent one of the NFL's most complete receiver trios.
Dallas figures to face competition for the SMU product, who won Super Bowl 50 as a member of the Broncos.
The Indianapolis Colts, New England Patriots, Oakland Raiders and Philadelphia Eagles are among the teams that will look to upgrade at wide receiver during the offseason.