Signal Iduna Park youngster will not be allowed to leave for the Emirates this summer.
Borussia Dortmund have blocked any attempts by Arsenal to prize midfielder Mario Goetze away from the Bundesliga champions.
The Daily Mail reports the Gunners saw the 18-year-old as the ideal replacement for Samir Nasri, who has yet to commit himself to a new contract with only 12 months left on his current deal.
Manager Arsene Wenger has been using his vast network of scouts all over Europe and has been given rave reviews about the Germany international.
But the Frenchman will face stiff competition from Inter Milan for Goetze’s signature who want him to replace Wesley Sneijder.
Dortmund do not want to lose another star after Turkey midfielder Nuri Sahin has joined Real Madrid.
Managing director Hans Joachim Watzke has issued a hands off warning to all clubs insisting Goetze is a player money can’t buy.
“We would not even think of selling Goetze until 2014 (when his contract runs out),” Watzke said.
“Even if another club owned oil fields or had billions of euros, it wouldn’t make any difference.”