The Spaniard is the club's top choice to replace Unai Emery and will meet Arsenal director Josh Kroenke "in the next couple of days to finalise his move," according to Jason Burt and Sam Dean at the Telegraph.
Arteta spent two hours discussing the job with Arsenal's chief negotiator, Huss Fahmy, and managing director Vinai Venkatesham on Sunday after their 3-0 defeat to Manchester City, per Julien Laurens at ESPN FC.
Arteta knows Arsenal well, having spent five years at the club as a player under Arsene Wenger. The midfielder made 149 appearances between 2011 and 2016 and won the FA Cup twice with the Gunners.
The former Barcelona youth player moved on to a coaching role with Manchester City after hanging up his boots in 2016, working alongside manager Pep Guardiola.
Guardiola said on Sunday he is open to the idea of Arteta leaving the club:
Arteta lacks managerial experience but came close to being appointed Arsenal boss in 2018. However, the move was blocked by then-chief executive Ivan Gazidis, and Emery was appointed instead, per Neil Moxley at the Mirror.
Arsenal sacked Emery in November after 18 months in charge following a run of seven games without a win in all competitions.
The Gunners have placed former midfielder Freddie Ljungberg in temporary charge, but results have barely improved. The team have won only one of five games under the Swede and continue to leak goals:
Per the Guardian's Nick Ames, Jacob Steinberg and David Hytner, Arsenal could have been willing to give Ljungberg until the end of the season to prove his worth.
However, recent results have left Arsenal just seven points above the relegation zone and suggest a decision needs to be made quickly. Ljungberg also called for clarity after Sunday's 3-0 home Premier League defeat to City, per Mark Mann-Bryans at the Evening Standard.
"I think, as I've said to the club, it's a great, great honour to do this," he said. "Of course, Per (Mertesacker) is the academy manager and he's doing two jobs in one go. I think it needs clearing up to make a decision so that everybody knows."
Appointing Arteta would represent a gamble for Arsenal given his lack of managerial experience but would not be a surprise given Manchester United have appointed former striker Ole Gunnar Solskjaer and Chelsea replaced Maurizio Sarri with Frank Lampard.
However, both Solskjaer and Lampard had worked as managers before taking on their new roles, unlike Arteta who has never taken charge of a first team in his career.