The 18-year-old has been on the books at the Emirates for seven years after joining from Charlton Athletic's academy in the summer of 2015.
Hutchinson enjoyed a stellar 2020-21 campaign at Under-18 level, banking seven goals and eight assists in 20 U18 Premier League games before making the step-up to the Under-23s.
Last season, the teenager scored six goals and set up six more in 17 Premier League 2 outings, as well as claiming two goals and an assist in four EFL Trophy matches.
Hutchinson also made the bench in the Premier League, EFL Cup and FA Cup, but he is yet to make his competitive first-team debut for the Gunners under Mikel Arteta.
The Spaniard handed Hutchinson some minutes in the 5-1 friendly win over Ipswich Town at London Colney earlier this month, but the youngster was a notable absentee from the pre-season squad for the current tour of the United States.
Fellow youngsters Charlie Patino, Marcelo Flores and Salah Oulad M'Hand were also left off the plane, leading to speculation that the crop could be sent out on loan for 2022-23.
However, The Secret Scout reports that Hutchinson is instead set to leave Arsenal on a permanent deal to join London rivals Chelsea in a surprising turn of events.
It is believed that Hutchinson will link up with the Blues' Under-23 squad, and he is not expected to be the only departure from the Gunners' youth ranks this summer.
Arsenal have undergone a major academy coaching shake-up this summer, with Kevin Betsy and Dan Micciche leaving to be replaced by Mehmet Ali and Jack Wilshere.
In spite of his lack of senior appearances for Arsenal, Hutchinson has already made his debut for Jamaica's first team, playing in a 6-0 loss to Catalonia two months ago.
Chelsea were previously linked with a move for another Arsenal starlet in Khayon Edwards, who had failed to agree professional terms with the Gunners for some time.
The 18-year-old eventually snubbed interest from the Blues to commit his future to Arteta's side in May, telling arsenal.com: "I'm very delighted to have signed my first professional contract.
"I've worked hard for this moment. It's been a very important season for me, but now it's time to step up and prove what I've proved time and time again."
Arsenal have allowed a number of Under-23s players to leave permanently this summer, namely Dan Ballard, Jordi Osei-Tutu and Zak Swanson, while Mika Biereth, Karim Rekik and Tyreece John-Jules have secured loan moves elsewhere.
Earlier on Friday, the Gunners also confirmed that American centre-back Auston Trusty had joined Birmingham City on loan for the 2022-23 season.