The 28-year-old became the Gunners' most expensive player when he joined in a £72m deal from Lille in 2019, but he failed to justify his price tag in North London.
Due to the emergence of Bukayo Saka, Pepe quickly fell down the pecking order under Mikel Arteta, who has also preferred Reiss Nelson and Fabio Vieira on the right flank in recent months.
Arteta sanctioned Pepe's loan exit to Nice for the 2022-23 campaign, where the Ivory Coast international sought to rediscover the form that made him one of Europe's most in-demand prospects during his time at Lille.
Pepe had notched 22 goals and 11 assists during the 2018-19 Ligue 1 campaign, but he managed just eight goals in 28 appearances for Nice and was told that his Arsenal career was over following his return to the English capital.
Pepe only had one year left to run on his contract, but Arsenal have not even been able to recoup a nominal fee for their former record signing, who was surpassed by £105m midfielder Declan Rice in the Gunners' all-time charts this year.
Now, the Gunners have confirmed that both parties have mutually agreed to terminate the winger's deal, and he is already confirmed to be on the way to Turkish side Trabzonspor.
"We can confirm that Nicolas Pepe is leaving the club. We have agreed with Nicolas to terminate his contract with immediate effect," a statement read. "Everyone at Arsenal thanks Nicolas for his contribution during his time with us and wish him well for the future."
Pepe was initially thought to have been in talks over a move to Besiktas and even passed a medical with the Super Lig giants, but a move supposedly broke down due to Arsenal revising their demands.
The former Lille man also turned his nose up to the riches of Saudi Arabia in order to continue in Europe, and Trabzonspor announced the winger's arrival earlier this week, posting an image of Pepe donning the team jersey on a private jet.
The Ivorian is understood to have agreed a one-year contract with Trabzonspor, leaving his future beyond the summer of 2024 unclear, and he leaves Arsenal having scored 27 goals and set up 21 more in 112 matches.
Pepe finished second in Arsenal's Player of the Year voting during the 2020-21 season, during which he netted 16 goals in all competitions, including 10 in the Premier League.
However, the 28-year-old netted just once in the 2021-22 top-flight season, equalising at home to Wolverhampton Wanderers before slipping Alexandre Lacazette through for the Frenchman to force a last-gasp Jose Sa own goal.
Pepe joins Ainsley Maitland-Niles, Matt Turner, Granit Xhaka, Pablo Mari, Auston Trusty, Rob Holding and Folarin Balogun in departing the Emirates permanently this summer.