The 26-year-old reignited his career on loan with the Serie A club after falling out of favour under Mikel Arteta at the Emirates and helped them qualify for the Europa Conference League qualifiers.
Torreira scored five goals and provided two assists in 31 Serie A games for seventh-placed Fiorentina and was expected to complete a permanent move to the Italian side this summer.
A buy option of €15m (£13m) was included in Torreira's loan deal to the Stadio Artemio Franchi, but Fiorentina ultimately decided against triggering the clause and tried to drive the price down.
Efforts to lower Torreira's salary could seemingly not be agreed either, and the Uruguay international has said goodbye to the Fiorentina fanbase while pointing the finger at those acting in a "negative fashion" for failing to make his move permanent.
"Dear Fiorentina fans, unfortunately the time has come to say goodbye. It is with great sadness that my bond with Fiorentina is ended. A club that gave me so much love and support for all this time," Torreira wrote on Instagram.
"From the start, you made me feel at home. I discovered a marvellous city that was always kind to me, both on and off the field. Thanks to your trust, I was able to rediscover the consistency and form I wanted.
"I owe that to my teammates and all the fans who gave me energy game after game. I want you to know that I always gave everything on the pitch for these colours. A special thank you to the staff of the club: chefs, managers, physiotherapists, managers and security.
"I want you to know that I did my very best to continue being part of this club, but unfortunately some - acting in my view in a negative fashion - managed to prevent that from happening, so this is why I must leave.
"I wish you all the best for the future. You will have another fan applauding from wherever it is I will go. Forza Viola, Lucas Torreira."
Torreira therefore prepares to return to Arsenal for the pre-season period, and his future is still shrouded in uncertainty as he enters the final 12 months of his Emirates contract.
The Gunners have allegedly offered Lazio the chance to sign Torreira in the summer transfer window and are desperate to avoid losing the midfielder on a free transfer at the end of next season.
Torreira arrived in North London from Sampdoria in the summer of 2018 and has gone on to register four goals and six assists in 89 appearances for the Gunners in all competitions.
The South American was a regular under Unai Emery but fell behind Granit Xhaka and Dani Ceballos in the pecking order in 2020, while he also endured a forgettable loan spell with Atletico Madrid in 2020-21.
Torreira's number 11 shirt has also been handed to Gabriel Martinelli for the 2022-23 season, but there have been calls for Arsenal to keep the Uruguay international on the books as they prepare for a return to the Europa League.
Arteta's side will try to bolster their midfield in the summer transfer window either way and are supposedly confident about their chances of sealing a deal for Leicester City's Youri Tielemans.