Nineteen-year-old centre-back Reuell Walters is considered one of the top prospects in the Gunners' Hale End academy system, coming up with one goal and two assists in 23 games for the youth team this season.
Walters has already trained with Mikel Arteta's first team and made matchday squads in the Premier League, Champions League, Europa League, FA Cup and EFL Cup, but he has never played for the senior side competitively.
There was hope that the England Under-20 international would have made his debut in December's Champions League dead rubber with PSV Eindhoven, but to Gooners' chagrin, he was an unused substitute in that 1-1 draw.
Having failed to force his way into Arteta's side despite his best efforts, The Athletic reports that Walters will leave the club when his contract expires at the end of the season.
Walters 'rejects Arsenal contract offer'
The Gunners apparently had high hopes for the former Tottenham Hotspur youngster and offered him a contract extension, but Walters rejected their proposal.
The Englishman supposedly believes that staying in North London would not be the best move for his career, although Arsenal are stressing that his departure has been mutually agreed.
Walters is not believed to be short of interest, as teams in England's top two tiers, Belgium, Spain, Germany, the Netherlands and Italy are all thought to be battling for his signature.
Arsenal will pocket just over £300,000 in training compensation should Walters - who has a German passport - join a foreign club, but if he continues his career in England, the Gunners can determine the amount of monies received.
The 19-year-old has been free to hold talks with teams elsewhere in Europe since entering the last six months of his deal, and he will be able to discuss a move to another English party this weekend.
Which players could follow Walters out of Arsenal?
While Walters's exit is particularly disappointing for Arsenal fans who never got a glimpse of the talented defender in senior action, his motivations for moving are understandable given that he has never earned his competitive debut for the first team.
The Gunners are also yet to make a breakthrough in discussions with winger Amario Cozier-Duberry, while academy goalkeeper Arthur Okonkwo has already confirmed his imminent departure when his deal runs out.
Experienced pair Cedric Soares and Mohamed Elneny are in the same boat, as are two other shot-stoppers in Aaron Ramsdale and Karl Hein, the former of whom will become a free agent in June.
Bids should also be entertained for Reiss Nelson, Emile Smith Rowe, Eddie Nketiah, Nuno Tavares, Albert Sambi Lokonga and Kieran Tierney, while Thomas Partey - soon to enter the last year of his contract - is still being linked with a move away too.
The future of Gabriel Jesus has been a hotly-debated topic too, but Arsenal dropped a hint over both his and Ramsdale's futures in the launch of their new home kit for the 2024-25 season.