The former Gunners midfielder's return to the club is set to be announced in the coming days as he prepares to replace Arsene Wenger.
Mikel Arteta
Mikel Arteta has agreed in principle to replace Arsene Wenger and become the new manager at Arsenal.
Goal understands that, while no contract has yet been signed, the announcement of Arteta's return to the Emirates Stadium will be made in the coming days.
Arteta's arrival comes in the aftermath of a cull of backroom staff, with the 36-year-old having played a major role in the recent sackings.
The Spaniard is currently assistant coach to Pep Guardiola at Manchester City and played a huge part in guiding them to their record-shattering Premier League title success this season.
Arteta is highly regarded by Gunners chief executive Ivan Gazidis, who believes a younger coach will slot into a modern European football structure, complemented by head of recruitment Sven Mislintat and new head of football relations Raul Sanllehi.
Arteta is expected to bring his own backroom staff on board, with reports linking Santi Cazorla as a potential addition, while the futures of Steve Bould and Jens Lehmann remain uncertain despite both receiving offers to stay at Emirates Stadium.
The emergence of Arteta as the Gunners' primary choice to replace Wenger comes in the aftermath of Massimiliano Allegri ruling himself out of the running, choosing instead to remain at Juventus.
Fomer Barcelona boss Luis Enrique was also considered, though Sanllehi - who knows the 48-year-old from his own time at Camp Nou - warned Arsenal off him due to him having proven difficult to work with.
Arteta left Arsenal upon his retirement from playing in 2016, having made 150 appearances for the club, scoring 16 goals and laying on a further 11 assists during his four seasons at the Emirates Stadium.