Lichtsteiner's contract with Juventus expired at the end of the season and the 34-year-old is now available on a free transfer.
A number of Chinese clubs were thought to be interested in signing the Swiss captain, but he has reiterated that the decision as to his next move will not be influenced by money.
"I don’t chase money and I need a place where I’ll have a good quality of life," Lichtsteiner explained, as quoted by the Metro. "My wife and children have to be happy and that wouldn’t be the case in China. I don’t need more money."
As per the report, a deal between the two parties is already in place, although there are still some minor details which are yet to be sorted. Lichtsteiner is keen to agree on a deal prior to the start of the World Cup, with Switzerland set to face Brazil in their opening game on June 17.
Should he join, the defender will become Unai Emery's first signing as Arsenal boss. The former PSG manager is keen to strengthen the right-back position, which has been occupied by Hector Bellerin for most of the season. Lichtsteiner will add a plethora of much-needed experience at little cost.
The 34-year-old has spent seven seasons with I Bianconeri since he joined from Lazio in 2011, helping the Serie A giants claim seven successive league titles.
This season, Massimiliano Allegri has opted to rotate between Lichtsteiner and Mattia de Sciglio at right back - although the Swiss international has still managed to make 27 league appearances.