The Spaniard is currently working as part of the Manchester City coaching team under Pep Guardiola.
But according to MailOnline, Arteta, who spent five years as a player under Wenger at the Gunners, is wanted by chief executive Ivan Gazidis at the Emirates.
It is believed the club want to go with "a younger coach with a fresh approach", with ex-captain Patrick Viera also being considered.
With Max Allegri this morning saying he will "stay at Juventus unless they sack me", there has been some big money lumped on Arteta.
After winning a fourth consecutive Serie A title, the Italian said: “Will I stay at Juve? Yes, I have a contract to honour."
SunSport reported yesterday how Guardiola is desperate for Arteta to stay at the Etihad – but wouldn't stand in his way if Arsenal came calling.
After champions City signed off in style by winning at Southampton to set a new record of 100 points in a top-flight season, Guardiola said: “What we have done this season, for all the staff, Mikel, his contribution, was outstanding, amazing.
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“We were together so good, all the staff, Mikel.
"So if he stays I will be happiest guy in the world.
“If he decide to move because he has this offer, this option, I will not say you don’t have to go.
“I want the best for my friends, and he’s a friend of mine, and I want the best.
“If he decides to go, I will be so sad, but I will understand his decision, because it’s his career, his life, his family, and I am not right guy to say you don’t have to do that.
“But hopefully hopefully he can stay and finish what we have started together in the coming years.”
Betway's Alan Alger told SunSport: “Despite not having any first-team managerial experience, Arteta is the one we’ve seen strong support for in the vacant Arsenal manager’s market.
“Pep Guardiola’s assistant at Manchester City has been backed into the 6/4 favourite for the job having been as big as 14/1 a few days ago, ahead of the long-time market leader Max Allegri, who is now 5/2."
But Emmanuel Petit is adamant that the job has come up too soon for both Arteta and Vieira.
SunSport understands the club had drawn up a 14-man shortlist for those who could get the top job – but that has now been cut to three.
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