He had been stalling on a fresh five-year £50,000-a-week deal which had left the Gunners fearing Juventus were set to sign him when his contract runs out this summer.
But after their win at AC Milan the 23-year-old said: "Like I've said before I'm very happy here. Every game I give more than 100 per cent and I love playing for this team.
"We're a new generation, we have to create a new history. I want to be part of that history so I hope I'll be here for next season.
"At the moment my advisers are talking with the club so I really hope everything will be OK. I can't put a time on it, but I really want to stay."