The Spaniard scored nine league goals last year. His current club, Malaga, are experiencing financial difficulties, thus prompting the sale.
A potential signing represents the third major deal completed by the Gunners this summer.
Not only are the figures out of character, but so too are the respective ages of the incoming players. Cazorla is 27, Podolski 27 and Giroud 25. Clearly, the hierarchy is building a team to win now.
The high fee paid for Cazorla would also appear to signal the end of Robin van Persie's days in London. Unless the team is suddenly flush with cash, a deal seems imminent. Rumors to that effect abound.
With these major structural changes in mind, we take a look at what the new starting XI might look like for Arsenal.
Szczesny is the best option for now.
He is coming off of a solid season in which he appears to have secured the job.
He is not the league's best, but he's a serviceable keeper who is relatively reliable.
The Frenchman is the first choice barring a slow return from a broken leg.
Other options include Carl Jenkinson and Francis Coquelin should his recovery take longer than expected.
For long stretches of 2011/12, the middle of the defense was a problem area for Arsene Wenger.
Then Koscielny stepped up, his compatriot returned from injury and things clicked.
This is his job to lose barring an additional signing.
As seems to be a constant with this defense, injuries are yet again an issue.
That said, if the big Belgian can avoid them, he is one of the Premier League's best.
Vermaelen followed up his PFA first-team 2009/10 year with more solid play in 2011/12.
While Gibbs has not quite ascended to the heights reached by his predecessor Gael Clichy, he is getting there.
Gibbs has loads of speed and has the added dimension of being a major offensive weapon.
With a little maturity, he should grow into a fixture at left-back for the Gunners.
ESPN broke the story that the Yann M'Vila transfer saga is over.
Whether it was discipline issues or the price tag, we may never know.
Regardless, Song is the best option for now.
Emmanuel Frimpong could be the player of the future at this position, but he has some maturing to do before then.
Wenger essentially has four attacking midfielders with Arteta, Rosicky, Oxlade-Chamberlain and Wilshere.
Conversely, Aaron Ramsey is about the closest thing they have to a traditional holding midfielder.
Given that extreme depth, I took one of their more dynamic attacking options and moved him back a bit.
This frees up a space for one of the aforementioned names while getting Wilshere on the field.
I sound like a broken record, but injuries are the biggest issue. If the young Englishman can avoid them, he has the look of a future national team captain.
With Wilshere playing elsewhere, there are a lot of interchangeable options that could go here.
While I do not think Mikel Arteta is the best option in terms of pure talent, I love his match-winning ability.
The Spaniard just seems to have a knack for stepping up at the right time.
That kind of leadership has been sorely lacking at the Emirates. As the club continues to press to end its trophy draught, you like having guys like this on the pitch.
Before rumors of this deal surfaced, Arsenal already had one of the deeper right flanks in all of England.
With Theo Walcott and Oxlade-Chamberlain battling for a place, there does not appear to be a dearth of options.
That point makes me wonder if Wenger is using this as a ploy to get Walcott to sign an extension. It could also mean that he has decided to sell Walcott.
Either way, it does not seem to make a ton of sense to have all three.
If they sign him, the Gunners get an experienced Spanish international who has won on some pretty large stages. His tactical ability on the wing fits the system extremely well.
Podolski has always managed to surface for big international matches.
The problem is that he never seems to have fully matched that form at the club level.
For a small club like Cologne, the German has no problem performing. But when signed by Bayern Munich, he faltered.
This will be his shot at redemption.
For the lower transfer fee paid, I think it is a great signing for the potential he brings.
The Frenchman is the heir apparent to his Dutch counterpart as van Persie continues to wrangle over contract terms.
To me, that saga has all the looks of a Nasri or Fabregas deal, part three.
Luckily for Gunners fans, they have an outstanding option in Giroud.
The Montpellier striker notched 21 league goals last term. If he can adjust to the more physical English game, he could be star at the Emirates.
1. This Arsenal Team Has Depth
Given this lineup, the bench features Alex Oxlade-Chamberlain, Theo Walcott, Gervinho, Per Mertesacker, Emmanuel Frimpong, Tomas Rosicky and Aaron Ramsey to name but a few.
While there are still a few concerns at center-back, left-back, center defensive midfielder and striker, overall this team looks a lot better than a year ago.
Arsenal were out of the title race before it started due to a glut of fall injuries. Do not expect a repeat in 2012/13.
2. Expect More Players To Be Sold
The two recent additions on the wing should force a few players out. Andrey Arshavin has been linked with a permanent move back to Russia by the Metro.
Wenger might also be preparing for life without Theo Walcott. With the rise of Oxlade-Chamberlain, and with Cazorla and Podolski on the books (in theory), playing time might be short.
3. This List Is Subject to Change
A few names on the bench, including Oxlade-Chamberlain and Ramsey, are on an upward trajectory. Expect a lot of rotation on the wings and in the midfield as Wenger juggles all this offensive talent.