The 22-year-old Spaniard has been told by Real Madrid boss Zinedine Zidane that he is likely to endure another season of bench warming should he remain at the Bernabeu.
Los Blancos have already spend close to £300m this summer as they look to reshape their ageing squad and so it is easy to see why this may be the case for Ceballos.
And it was Spurs who looked like winning the race for his signature earlier in the summer with Mauricio Pochettino looking to bring in midfield reinforcements.
But the arrival of Tanguy Ndombele from Lyon for big money has left the door open for the Gunners.
And, according to Spanish publication El Confidencial, Ceballos is “a foot and a half” close to moving to the Emirates after boss Emery took matters into his own hands.
The reports suggests that the Spaniard called Ceballos and told him that he would be a key part of Arsenal’s plans should he complete a move.
The midfielder was believed to be impressed with Emery’s “obsession” to bring his compatriot to north London.
“I don’t want to speak about the names but Ceballos is a very good player”
Arsenal have completed just one signing this summer, with 18-year-old forward Gabriel Martinelli heading to the Emirates.
The Gunners are keen to make more additions, however, they have a limited transfer budget.
After failing to finish in the top four and losing in the Europa League final, Arsenal were left with around £40m to spend this summer.
Asked about the rumours on Arsenal’s pre-season tour, Emery replied: “I don’t want to speak about the names but Ceballos is a very good player.”
Though Arsenal only have small amount to spend on new recruits, Emery insists the club are looking to sign “very big, very expensive” players.
“Our target is to achieve three, four players to really improve our team and squad now,” he said.
“We are being very demanding and we are also first speaking about the possibility to sign very big players, very expensive.
“The first player in our list is the first target and after, if we cannot have that then [we try to sign] the second, but thinking every time that they are going to improve our team.”