The Estonia international served as Mikel Arteta's third-choice stopper behind David Raya and Aaron Ramsdale in the 2023-24 campaign and has just one senior appearance to his name for the North London giants so far.
Hein's first-team debut came in a 3-1 EFL Cup defeat to Brighton & Hove Albion in the 2022-23 campaign, and his only appearances for the Gunners in 2023-24 came at Under-21 level.
The 22-year-old was due to become a free agent at the end of the month, but the Gunners confirmed that they were discussing a new deal with Hein, in spite of his lack of action thus far.
All parties were confident of an agreement being reached, and Arsenal have now announced that Hein has put pen to paper on a renewal of unspecified length ahead of a possible loan move for the 2024-25 season.
Hein "delighted" to extend contract with "amazing" Arsenal
"I'm delighted to extend my contract and continue my journey in this amazing club after six years. Hopefully, there will be even more good memories and successes for the club," Hein told the official Arsenal website.
Head coach Arteta congratulated his third-choice shot-stopper on his renewal, adding: "Karl has continued to impress us with his attitude and commitment to getting better every day. We value being part of his continued development and I want to congratulate him on earning a new deal with the club."
Finally, sporting director Edu hailed Hein as an "exciting prospect" and "popular" member of the dressing room at London Colney, saying: "We're very happy that Karl will continue his development as an Arsenal player.
"He's an exciting prospect and a popular member of the squad. We look forward to seeing him progress to the next stage of his career."
Hein joined the Arsenal academy from Nomme United in the summer of 2018 and was on the bench throughout Arsenal's 2023-24 Champions League campaign, where Arteta's side reached the quarter-finals.
The 22-year-old has established himself as Estonia's first-choice goalkeeper and has already won 30 caps for his nation, whom he captained in a 2-1 friendly loss to Finland back in March.
What does Hein's new contract mean for Ramsdale?
Keeping Hein on the books represented a crucial bit of business for Arteta and sporting director Edu, who have already seen another academy product in Arthur Okonkwo leave the club to sign for Wrexham on a permanent deal.
There has still been no confirmation that Raya's loan from Brentford will be converted into a permanent deal, but all the documents are believed to be in place, and it is only a matter of time before the Spaniard's stay is announced.
Raya's stay has been expected to precede Ramsdale's exit, as the 26-year-old was unhappy with being demoted to second choice last season and is expected to push for an exit in search of regular game time.
Hein's renewal could open the door for Ramsdale to head elsewhere if Arteta deems the Estonian ready to play second fiddle to Raya next year, but the 22-year-old leaving on loan could see Arsenal make a concerted effort to keep Ramsdale or be forced to enter the market for another shot-stopper.