Gunners spies were alerted to the South Korea international's talents while on scouting assignments in Scotland last season.
The club's scouting network have kepta closer eye on the 23-year-old who has been dubbed the South Korean Steven Gerrard in his homeland during the Olympic Games and have been suitably impressed.
Crucially, influential chief scout Steve Rowley rates Ki who would be available for around ?9million very highly and will recommend the energetic midfielder to manager Arsene Wenger.
Ki, who scored South Korea's decisivespot kick in their penalty shootout win over Great Britain in the Olympic quarter-finals on Saturday, is also wanted by Queens Park Rangers manager Mark Hughes.
Arsenal are also interested in Ki's club team-mate Victor Wanyama, who was watched by Wenger's scouts in Celtic's recent pre-season defeat by Norwich.
Meanwhile, Arsenal confirmed the capture of Cazorla from crisis-hit Malaga yesterday and the 27-year-old got straight down to business training with his new team-mates at their pre-season camp in Germany.
The Spain international who was joined in Germany by Robin van Persie has revealed that two former Arsenal stars played a key role in his decision to join the club.