The midfielder has seen limited opportunities at Real Madrid this season and in his bid to play in the European championship next year, he wants to leave.
The report says that several teams want Isco, but the midfielder may end up at Arsenal in the summer.
This is because Arteta has specifically told Arsenal that he has the profile of the creative midfielder that he wants to join his team.
The report says that the Gunners haven’t put in an official bid for him yet, but they are working towards a January move.
It adds that Arsenal plans to land Isco on loan for the rest of the season and then make the transfer permanent next summer.
However, it claims that the arrangement might not impress Madrid because the Spanish side would like the transfer to be done next summer when they will have better options at replacing him.
Isco has reportedly seen how Dani Ceballos left the Bernabeu and is now enjoying his football at the Emirates and he wants to join the midfielder under the wings of Arteta as he rebuilds the Gunners.