Both clubs are believed to have reached an agreement after a dispute over the transfer fee threatened to scupper the negotiations.
The Bundesliga outfit were said to be keen on pocketing £35m for their prized asset, while the Gunners were believed to have been reluctant on paying more than £30m.
However, according to the Daily Mail, the North London club are determined to land the German youngster and have agreed to make up the £5m deficit in valuations with additional clauses and bonuses.
The report goes on to state that negotiations are at an advanced stage and that confirmation of the move could be announced as early as today.
Should a switch materialise, then Draxler would be the sixth German player on Arsenal's books, with Mesut Ozil - a club-record £42.5m signing in September - Per Mertesacker, Lukas Podolski, Serge Gnabry and 17-year-old Gedion Zelalem already at the club.