Crystal Palace are preparing a £30million bid for Emile Smith Rowe, talkSPORT understands.
Fulham have already submitted an offer for a fee of £25m which has been rejected by Arsenal.
The Gunners are understood to be willing to part with the midfielder if offered £35m.
Napoli and Aston Villa They have also been attributed an interest.
Leaving Arsenal would be a difficult decision for the 23-year-old who has been with the north London club since he was 10.
However, with first-team football being a priority, it is possible that he has already played his last game for the Gunners.
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With two years left on his contract, Arsenal will be interested in receiving a decent offer for the player, something Crystal Palace could be preparing for.
The Eagles are looking for creativity in the transfer market following the decision to sell Michael Olise to Bayern Munich for £60m.
Croydon-born Smith Rowe joined Arsenal's famed Hale End academy aged 10 and burst into the first team as one of their most naturally gifted players.
Smith Rowe, who broke into the team at the same time as Bukayo Saka, Joe Willock, Reiss Nelson and Eddie Nketiah, spent the second half of the 2018/19 season with RB Leipzig but made just three appearances.
In January 2020, he joined Huddersfield on loan and scored twice and provided three assists in 19 Championship appearances.
Given the chance to impress in Arsenal's first team, the midfielder became a regular between 2020 and 2022, before falling out of favour.
Last season, Smith Rowe made just 13 Premier League appearances and recorded just one assist.