Villarreal have confirmed their defender Gabriel Paulista will sign for Arsenal subject to a work permit, with forward Joel Campbell joining the Spanish side on loan as part of the deal.
Sky sources reported last Tuesday that the Gunners had begun talks to sign the 24 year-old Brazilian, which was confirmed by manager Arsene Wenger on Thursday.
Paulista has agreed a long-term deal, with a fee believed to be £11.2million agreed between the clubs, and Villarreal pay Arsenal £700k to loan Costa Rica international Campbell.
Paulista's release clause was believed to be £14.9m but Arsenal have been able to reduce the cost after several days of negotiations that Wenger expressed were "progressing quite well".
Ahead of his side's FA Cup fourth round tie at Brighton tomorrow, the Frenchman said: "We are ready to pay the price we think right for a good player, no matter what the price is. If we think it’s the right price we will pay.”
Paulista joined Villarreal from Brazilian side Vitoria in 2013 and has made 45 appearances for the club, but he has never been picked for his national side at youth or senior level.
Arsenal striker Campbell, meanwhile, was made available for loan after failing to break into the first team following an impressive World Cup last summer, with a number clubs interested in bringing him in.
Among those were Garry Monk's Swansea and David Moyes' Real Sociedad, but the 22-year-old will continue his development on the east coast of Spain as Villarreal continue their push for a place in Europe next season.