Emile Smith Rowe has signed a new long-term contract at Arsenal.
The 20-year-old has also been given the No 10 shirt, previously worn by Mesut Ozil, for the upcoming season.
Arsenal manager Mikel Arteta said: "As we all saw last season, Emile is an intelligent player with excellent ability.
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"His sharpness on the turn and exceptional vision have already made him a key player for us. His attitude and willingness to learn have also been very impressive.
"I know the fans will join us in being delighted that Emile has committed his future to the club. We're now looking forward to helping him develop further and seeing him become even more important to the strong young team we're building."
Smith Rowe impressed during the second half of last season, scoring four goals and providing seven assists in 33 appearances in all competitions as Arsenal finished eighth in the Premier League.
Arsenal rejected two bids from Aston Villa for Smith Rowe this summer, with the second offer believed to be in the region of £30m.
Smith Rowe is an England youth international and has previously had loan spells at Huddersfield and RB Leipzig.
Meanwhile, Arsenal have an agreement in principle with Brighton over the potential signing of defender Ben White in a deal that could be worth in excess of £50m.
The club also remain in talks with Roma over the sale of Granit Xhaka and despite a small gap in valuation, all parties are confident a resolution will be found.
Analysis: Smith Rowe deal boosts Arsenal
Sky Sports' Nick Wright:
Arsenal fans were understandably perplexed by the protracted nature of contract negotiations with Smith Rowe - particularly as Aston Villa tried to tempt the club into a sale - but the confirmation of the deal represents a significant boost.
His introduction to the team on Boxing Day was arguably the biggest catalyst in Arsenal's upturn in form in the second half of the season. Mikel Arteta's side had a 58 per cent win rate in games he started compared to one of 41 per cent in games he did not.
The 20-year-old brought creativity and goal threat to their attack, in addition to tireless off-the-ball work rate, and the decision to hand him the No 10 shirt reflects just how highly he is regarded within the club. Arsenal will now aim to build around him, together with fellow academy graduate Bukayo Saka.
Smith Rowe's numbers for goals and assists do not reflect the extent of his importance to the side last season but it is telling he created more chances from open play per 90 minutes than anyone else at the club. The hope now is that with the No 10 on his back, his exciting development will continue in the years to come.
This could prove to be Arsenal's best piece of business this summer.