Ozil is set to join Fenerbahce as a free agent.
Arteta said: "Yes, for many different reasons [it was a tough decision]… there is a history here what happened in the past few years, how things developed, how I think the team should evolve for the future, and his position at the club.
"A player with such an importance that is not playing, that is not in the squad, it is a really difficult situation to sustain for both parties because the player wants to play and we annot give him the minutes. Obviously that situation has to be resolved.
"He is a great footballer, a really talented footballer, a player who has done a lot for the football club but at the moment I want to take the team in a different direction.
"If we were to have more options, then maybe he was part of some plans - he was part of some plans at the start, and he wasn't at the end."
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