All perfect praise be to Allaah, The Lord of the worlds. I testify that there is none worthy of worship except Allaah, and that Muhammad, sallallaahu ‘alayhi wa sallam, is His slave and Messenger.
It is permissible to send blessings on the prophet, sallallaahu ‘alayhi wa sallam, saying: "Allaahumma salli ‘ala Sayyidina Muhammad (O Allaah, Send blessings upon our master Muhammad)?”
However, it is better to do so the way that he, sallallaahu ‘alayhi wa sallam, taught his Companions when they said to him: “O Messenger of Allaah. We know how to send (the greeting of peace) upon you but how should we send blessings upon you?” He said, “Say: Allaahumma salli ‘ala Muhammadin ‘Abdika wa Rasoolik kama sallayta ‘ala Ibraaheem; Allaahumma baarik ‘ala Muhammadin wa ‘ala aali Muhammadin kama baarakta ‘ala Ibraaheema wa‘ aali Ibraaheem" (O Allaah, Send prayers upon Muhammad, Your Slave and Messenger, as You sent prayers upon Ibraaheem. O Allaah, Send blessings upon Muhammad and upon the family of Muhammad, as You sent blessings upon Ibraaheem and the family of Ibraaheem.) [Al-Bukhari and others]
This Hadeeth has many other wordings and none of them includes the word Sayyidina and it is what is well known among the Companions .