The German-born Turkey international made just 10 appearances in his debut season at the Santiago Bernabeu after joining from Borussia Dortmund last year.
Despite signing a six-year deal with Los Merengues he has struggled to break into the starting eleven and boss Jose Mourinho is prepared to let him leave on a temporary basis.
Tottenham Hotspur were rumoured to have been offered the 23-year-old bythe Spanish champions as part of the deal to bring Luka Modric to the La Liga giants this summer.
It’s now emerged that the Gunners are on the verge of completing a loan deal for Sahin despite boss Arsene Wenger appearing to rule out bringing the midfielder to North London.
The Frenchman also distanced himself from rumours linking him with a move for Rennes anchor man Yann M’Vila stating that his engine room is already well stocked.
“No [I am not interested in M’Vila]. We wait on [Abou] Diaby and [Jack] Wilshere,” Wenger said.
“When you look we have Alex Song, Aaron Ramsey, Francis Coquelin, Wilshere, Mikel Arteta and Diaby.
“In defensive midfielders and box-to-box players we are not short if they are all coming back.
“If we have setbacks in pre-season it could be different.”
Sahin holds the distinction of being the youngest player to appear and score in the Bundesliga having made his debut for Dortmund in 2005 at the tender age of 16.
Wenger is still hopeful of bringing Malaga winger Santi Cazorla to the Emirates Stadium with reports claiming he’s made a £20 million bid for the Spain international.
Cazorla has emerged as a serious target in the past fortnight and the 27-year-old is thought to be keen on plying his trade in the Premier League next season.