La Real president Jokin Aperribay has been in London this week for negotiations with the Gunners.
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BBC Sport says the two clubs have reached an agreement over a fee rising to £32.6m.
Merino's La Real deal has less than 12 months to run and his fee breaks down to £28.4m plus £4.2m in bonuses.
The Spain Euros winner has been training away from Imanol Alguacil's senior squad this week in anticipation of Aperribay reaching an agreement with his Arsenal counterparts.