Lucas Torreira flopped while on loan at Atletico Madrid last season, even though they won La Liga.
His failure to be an influential figure at the Madrid side could have seen him return to Arsenal, where he is not wanted.
However, he moved on loan to Fiorentina before the end of the last summer transfer window.
That move has been a success so far and the Italian club is likely to sign him permanently.
They and Arsenal agreed to a fee in the region of 15m euros if he does well and they want to keep him.
La Repubblica via Labaro Viola is reporting that he has impressed enough to earn a permanent move.
The report claims both clubs will meet soon for the Italians to complete the transfer.
However, it adds that adding him to their squad permanently will depend on if the Serie A side qualifies for a European competition.
They are one of several clubs who can make at least the Conference League now.
They have lost Dusan Vlahovic, which will affect them for the rest of the season, but they can still make it to Europe.
Just Arsenal Opinion
It is great that Torreira is redeeming himself at another club. It is a win-win situation for him and Arsenal.
His fine form in Florence means even if Fiorentina doesn’t sign him, he would have other suitors who will be interested in a move for him.
That means we are almost guaranteed to make some money from his sale at the end of this season.