Real Madrid are prepared to let Vinicius Junior leave this summer after contract renewal talks stalled.
The club will not improve their latest proposal for the 26-year-old Brazilian winger.
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Vinicius has entered the final year of his contract at the Santiago Bernabeu.
Real Madrid executives say the decision rests with the player: accept the offer or request a transfer.
The forward is due to report for pre-season training at Valdebebas on Monday, following his post-World Cup holiday.
Arsenal are monitoring the situation and assessing the financial feasibility of a transfer.
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Internal figures at the London club believe they could sign him if he decides to leave, though sources close to the player say no direct contact has been made.
Vinicius finished as runner-up for the 2024 men's Ballon d'Or and has scored in two Champions League finals.
He also had a public fallout with former head coach Xabi Alonso, showing anger after being substituted in a Clasico last season.
As talks remain unresolved, Real Madrid continue their summer schedule.
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They face Fiorentina in Austria on Saturday in their first official pre-season friendly, after closed-door matches against Alcorcon and Leganes.