The Estonia international, who is behind David Raya and Aaron Ramsdale in the Gunners' pecking order, was due to become a free agent at the end of the 2023-24 season but signed a one-year extension at the Emirates.
Hein's short-term renewal was expected to precede a loan move away from North London, even with the possibility of Ramsdale leaving on a permanent deal before the window shuts.
With Raya and Ramsdale being part of the Spain and England squads that reached the Euro 2024 final, Hein has been offered ample opportunities in pre-season, starting all three games of their USA tour against Liverpool, Manchester United and Bournemouth.
The Estonian was the hero against the Cherries in the penalty shootout, saving from both Ryan Christie and Philip Billing, but according to the Evening Standard, he is now set to spend the next year away from North London.
Real Valladolid 'win race' for Arsenal's Hein
The report claims that Hein will be donning the Real Valladolid strip for the 2024-25 campaign, as the Spanish side have successfully hijacked Charlton Athletic's move for the Arsenal man.
Charlton were supposedly just one of a handful of English teams to show an interest in signing Hein, but neither he nor Arsenal were in a position to turn down a move to the Spanish top flight.
The 22-year-old's switch is not expected to include an option or obligation to buy, and he will simply head to the Iberian Peninsula in order to enjoy more regular game time.
Hein came through the youth ranks in Estonia with Nomme United before signing up to the Arsenal academy in 2018, but his only competitive appearance for the Gunners so far came in a 3-1 EFL Cup loss to Brighton & Hove Albion in 2022.
In spite of his lack of senior action for Arsenal, Hein is already a fully-fledged Estonia international, making 30 appearances for his nation and captaining them in a friendly loss to Finland earlier this year.
What is the latest on Ramsdale's future?
As Hein bids farewell to his Arsenal teammates for a year, the Estonian's exit could have implications on the future of Ramsdale, whose desire to become a number one again is no secret.
The England international has already admitted that he never wants to experience another season similar to 2023-24 again, although Hein's exit suggests that Arteta is still banking on keeping him around as his number two.
However, as the Gunners are believed to be interested in signing Wolverhampton Wanderers' Daniel Bentley, whom they have already seen at least one bid rejected for, Ramsdale could be used as a bargaining chip.
Wolves are said to be interested in signing Ramsdale, throwing up the possibility that they could offer Bentley and a cash sum in exchange for the ex-Bournemouth and Sheffield United man.
Arsenal are yet to receive any serious bids for Ramsdale, though, and the goalkeeper is now back in training ahead of Wednesday's friendly against Bayer Leverkusen.