The Telegraph reports that Arteta, a former Arsenal captain, held further talks with the club on Thursday and it is now expected that he will become only the fourth permanent Gunners boss of the Premier League era.
However, despite the news of more talks and City's own resignation to losing their coach, Arteta and Arsenal have yet to agree on terms, while he has not handed in his resignation at the Etihad Stadium either.
That all may change in the coming week, however, with Guardiola admitting he wouldn't stand in the way of Arteta's chance at management, while Arsenal may be ready to appoint after clearing out several of Wenger's backroom staff in anticipation of a new era.
While the likes of fellow ex-Arsenal players Patrick Vieira and Thierry Henry have also been interviewed for the job, it seems the Gunners board have settled on Arteta, after Juventus boss Max Allgeri indicated his desire to stay in Turin.
Crucially, Arteta has also received a public endorsement from the outgoing Wenger, who said of his former charge: "He has all the qualities to do the job." In addition, the former Everton and Rangers star is also favoured by Arsenal chief executive Ivan Gazidis, who is overseeing the recruitment process. The Telegraph claim Gazidis also sees Wenger's 'values' in Arteta.
36-year-old Arteta was signed for Arsenal by Wenger in 2011 from Everton and spent five years at the club, making over 100 appearances and also serving as captain. After retiring the former Real Socieded midfielder moved into coaching and was made assistant to Guardiola at City in the summer of 2016.