Arsenal blocked Rangers' bid for Harry Clarke before he joined Hibernian.
The Gunners instead allowed the 20-year-old to join fellow Scottish Premier League side Hibs.
Clarke will spend the next 18 months at Easter Road.
According to The Sun, Arsenal rejected a permanent transfer bid from Rangers for Clarke
Clarke's season-and-a-half loan deal in Edinburgh includes two break clauses.
The Englishman made 17 appearances for Ross County in the first half of the 2021-22 season before being recalled by Arsenal.