Schalke left-back Sead Kolasinac will join Arsenal when his contract expires this summer, according to Sky sources.
The 23-year-old, born in Germany but a Bosnia-Herzegovina international, will officially become an Arsenal player on July 1.
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Everton, Manchester City and Milan also made offers to Kolasinac, but the defender has chosen a move to north London despite uncertainty over Arsene Wenger's future as manager.
Wenger admitted last month he was planning for next season, but there has still been no announcement on whether he will leave this summer or sign a new deal.
"Do I stay two months or 10 years? I plan," he said. "I do my job exactly the same. Of course you can do that.
"Of course [transfer targets will ask if I will be at the club], but we are always honest. Arsenal is a world brand today, respected all over the world.
"The Arsenal name is bigger than my name and coming to Arsenal is more important - you don't come to Arsene Wenger, you come to Arsenal."
Arsenal currently have two senior left-backs in their squad - Nacho Monreal and Kieran Gibbs, who is approaching the final year of his contract.