Iwobi had been with the Gunners for 17 years, having joined the club at the tender age of six and progressing through the club's academy.
Posting on his Twitter account, Iwobi wrote: "I Grew Up Dreaming Of Playing For Arsenal, Following In The Footsteps Of Some Of My Hero's [sic]. I'm Proud To Say That @ 23 I've Achieved One Of My Dreams.
"From Playing For Arsenal Kids To 149 Senior Appearances. It Was An Honour To Play For The Club I Supported As A Boy. I've Enjoyed Every Minute Of It.
"So Many People To Thank, Far Too Many Individual Names To Mention But I Thank You All ! So Many Great Moments, From Scoring My First Goal At The Emirates To Scoring My Last Goal In Baku.
"You've All Played A Big Part In My 17 Fantastic Years. Special Thanks To The Fans, My Team Mates, The Support Staff, My Coaches Arsene Wenger and Unai Emery Who Put Faith In Me And Gave Me The Opportunity to Grow As A Player And A Man.
"BIG Love To A Special Club. Arsenal Will Be Forever In My Heart."