The 15-year-old midfielder, who has progressed through the Robins' youth system, has been on Arsenal's radar for some time and recently returned from an under-16 tournament in Italy where he represented the Gunners against some of Europe's elite.
And he now looks set to follow in the footsteps of a long list of young players who have progressed under the watchful eye of Arsene Wenger and the Premier League giants' development scheme.
Chairman Paul Baker told the club's official website: "Cheltenham Town have reached a financial agreement with Arsenal for the transfer of Jamie Edge.
"We believe it is an excellent deal for the club both in terms of the money we will receive this season and next and further payments that become due depending upon the progress Jamie makes at both club and international level.
"It is a particularly exciting opportunity for Jamie who now has to agree personal terms with Arsenal before the deal can be confirmed."