Real Madrid’s talented midfielder is poised to head for north London, but not to neighbours Tottenham.
Spurs were chasing a deal to lure the Spaniard to the Premier League on a permanent basis.
However, Ceballos still hopes to prove himself at the Bernabeu and only intended to leave on loan.
Arsenal have subsequently hijacked Tottenham’s pursuit and Starsport understands the 22-year-old is set to play for Unai Emery’s side.
The Gunners are just waiting on Zinedine Zidane’s approval.
Although it is expected the French manager will give the all clear to Ceballos joining Arsenal where he is likely to get guaranteed game time.
The loan suits Arsenal, Real and Ceballos, especially as Emery has a limited transfer budget to play with this summer.
While a midfielder has not been his priority amid hunts for a centre-half, a left-back and a winger, Emery will not turn down such a good opportunity.
“Confirmation of his arrival could now come as soon as this wee”
Due to Ceballos’ relatively low wages too, Arsenal are happy to pay the full amount while he is away from Real.
According to Spanish newspaper Marca, Ceballos earns around £2.7m annually, which equates to just over £50,000-a-week.
Confirmation of his arrival could now come as soon as this week, it is understood.
READ MORE: Dani Ceballos’ Arsenal move is set to be confirmed on one condition
There will not be a purchase option included in the deal, with Ceballos set to return to Madrid in the summer of 2020.
He hopes to be a part of Zidane’s plans for the 2020/21 campaign, having learned he would not feature regularly this term.
At Arsenal, however, Ceballos should play often in the Premier League and Europa League, with Aaron Ramsey’s departure for Juventus having limited Emery’s options in the middle.