Nwaneri is a target for the Gunners' Premier League rivals, and the club are keen to tie the talented-teenager down to long-term deal.
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The 16-year-old became the youngest player in Premier League history, after featuring in Arsenal's 3-0 victory over Brentford in September, aged 15 years and 181 days old.
"The first time I met him, I looked into his eyes and I had that feeling. I really liked what I saw," Arteta said at the time, when asked why he had decided to give such a young player a league debut.
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"Per Mertesacker [Arsenal's academy manager] and the staff are giving me really good information, Edu [Arsenal's sporting director] as well."
His impressive displays may have caught the attention of both Chelsea and Man City, but none more so than Arsenal U18 head coach, Jack Wilshere.
"We all hope he stays because he's an exceptional talent," he said.
"As coaches, we don't get involved and we don't talk about that. I think we have to make it clear we don't talk about that.
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"That's nothing. Our job is to develop Ethan to help him when he goes with the first-team."
Nwaneri has not featured for the first team since his Brentford debut, but continues to star in the U18 Premier League, having managed three assist and two goals in nine appearances.
The youngster has also netted twice in the FA Youth Cup, and has seven goals in 12 caps for England U17s.
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Young players are not able to sign professional deals until they are 17 years old, but can agree scholarship terms at Nwaneri's current age of 16.