The Gunners are understood to have agreed a fee in the region of £7m for the 19-year-old, who has been with Lorient since 2014.
A number of reports in France claim that a five-year contract has also been agreed between the two parties, leaving only a medical to complete before the deal can be finalised.
Guendouzi is now expected to fly out to London on Monday to put the finishing touches to the move, which would see him become Arsenal's fourth summer signing.
New Gunners boss Unai Emery has already brought in Bernd Leno, Stephan Lichtsteiner and Sokratis Papastathopoulos since arriving at the club, while Uruguay midfielder Lucas Torreira is also thought to be close to a move to the Emirates.
Guendouzi has previously been linked with Arsenal's North London rivals Tottenham Hotspur.