Walcott family that Theo's future will be best served with a switch to North London and The Gunners are ready to make a £4 million down payment in order to secure his services.
Saints chairman Rupert Lowe and director of football Clive Woodward reportedly sat down with Arsenal vice-chairman David Dein as the two sides set about thrashing out a deal for the youngster.
The fee could rise to £9 million depending on how well Walcott and Arsenal perform, and it is believed that the talented young forward could play his last game for The Saints when they take on Queens Park Rangers on Saturday.