Gunners boss Arsène Wenger is keen to push through a move for the Spain international as he looks to bolster his frontline before letting captain Robin Van Persie leave the club.
He is hopeful an offer of 20 million Euros (£15.6m) will be enough to convince the Spanish side to sell with a with a basic agreement already in place.
Malaga’s perilous financial situation has seen them ditch the 45m Euros buy-out clause in Cazorla’s contract that initially deterred the North London club from making an approach.
He has already informed chiefs at the Estadio La Rosaleda of his plans to depart this summer and they are prepared to cash in as he eyes a switch to the Premier League.
The 27-year-old only joined Los Boquerones last year from Villarreal for 19m Euros but is determined to leave following a series of broken promises and unpaid wages.
A move to the Emirates Stadium would certainly give Wenger some mouthwatering options up front after signing strikers Lukas Podolski and Olivier Giroud last month.
Should he sign the Spaniard will almost certainly battle Theo Walcott, Alex Oxlade-Chamberlain and Gervinho for a starting spot on the wings in Arsenal’s new look attack.
Meanwhile, Van Persie’s departure is almost set in stone after revealed he would’t be renewing his contract, which has a year to run, and admitted his vision for the future doesn’t match that of the clubs.
Italian champions Juventus are thought to have been back in contact and are prepared to pay near the £20m asking price on the Holland international’s shoulders.
Manchester United and rivals City are also in the running with reports indicating they’ve already submitted bids of £12m for the 28-year-old.