Manager Unai Emery is happy for Shkodran Mustafi to leave the Emirates, after bringing in David Luiz from Chelsea on deadline day.
The deal will include an option to purchase, which could earn Arsenal as much as €25million (£22.9m/$27.7m).
Mustafi is yet to play a single minute for the Gunners this season, after being left out of their successive victories against Newcastle and Burnley in the Premier League.
Emery has already confirmed that they expect to sell players, before the European transfer windows close later in August and early September.
Mustafi is top of the list of players Arsenal are hoping to move on, although they have not received any offers to sign a player they paid Valencia £35million for three years ago.
The 27-year-old, who has two years left on his contract, is not keen to leave, but Emery has hinted that he told him he could go.