Manchester City boss Pep Guardiola has confirmed that Mikel Arteta has held talks with Arsenal over succeeding Unai Emery at the Emirates Stadium.
Arteta has emerged as the number one candidate to become the Gunners' next permanent manager, after holding a meeting with the club's managing director Vinai Venkatesham in the early hours of Monday morning.
Goal understands that negotiations with the two parties are due to continue, with a final decision set to be reached by the end of the week.
Arteta has no previous managerial experience, but he has served as Guardiola's assistant for three trophy-laden seasons at the Etihad Stadium.
City have won seven major honours during that time, including back-to-back Premier League titles, fully establishing themselves as the dominant force in English football while breaking all kinds of records.
Guardiola's men will be aiming to continue their defence of the Carabao Cup when they travel to Oxford United for a quarter-final tie on Wednesday.
Despite ongoing speculation over his future, the City boss has revealed that Arteta will be joining him in the dugout at Grenoble Road, but he is not yet certain whether he will be able to continue to rely on the 37-year-old.
When asked to address Arteta's position at a press conference on Tuesday, Guardiola stated: "I know what you know. Today I saw him. He’s travelling, yes.
"We were so smart to pick him up and now the others want him. He’s an incredible person, a good manager, that’s why he’s done well with us.
"He’s talking with Arsenal so I don’t know what’s going to happen."
Guardiola added on being kept in the loop regarding Arteta's meeting with Arsenal's director at the start of the week: "Yes, I knew it. He’s an adult, he knows exactly what to do. He was incredibly honest with me.
"The organisation of the club is always live, it doesn't always stay the same, what works today might not work tomorrow. The people today maybe won't be here tomorrow.
"Now he's part of our group and staff and he stays here. When we have any new news I'll know, you'll know and we'll see what happens
"It happens. We had Lee Nobes went to Liverpool and now teams want Mikel. He knows what we want, what we'd like, but in the end, it’s his decision. We decided to work together three years ago, I’d like him to be up here on Wednesday."
City are also still contention for European silverware, having booked their place in the Champions League knockout stages by finishing top of Group C.
The Premier League champions were handed a tough last-16 tie against Real Madrid when the draw was made in Switzerland on Monday, which will see Guardiola resume hostilities with a familiar rival from his Barcelona days.
"It's an incredible test for us. The kings of this competition, we’ll prepare as best as possible, we’ve got two months and we'll see what situation we arrive in come February," the former Barca boss added.