Iwobi has agreed terms on an improved contract following talks which have been ongoing since the end of last season.
Iwobi’s previous deal, signed in 2015, ran until 2020.
But the 22-year-old attacking midfielder is set to extend his stay at Arsenal until 2022 when he puts pen to paper on his new agreement.
And Nigeria international Iwobi will commit his future to the Gunners despite interest from Lazio, AC Milan and Everton.
Having left contract renewals until too late in the past, Arsenal have been on a drive this year to tie down some of their players.
Mesut Ozil, Mohamed Elneny, Granit Xhaka, Calum Chambers, Rob Holding and Ainsley Maitland-Niles have all penned fresh deals in 2018 and academy product Iwobi will be next.
The future of Aaron Ramsey remains uncertain though as he has now entered the final year of his contract.
The Sun had reported that Arsenal had put a £22.5m price tag on Iwobi amid interest from Lazio.
The Serie A giants are in the market for a winger after flogging Felipe Anderson to West Ham this month.
And, according to Italian publication Il Messaggero, Iwobi is one of two Gunners on their wishlist.
The other player is flop striker Lucas Perez, who it is claimed has a similar asking price.
Versatile winger Iwobi, 22, has seen his progress stall at Arsenal since breaking into the first team in 2015.
The player represented Nigeria at the 2018 World Cup in Russia.
Meanwhile, Emery could be on the verge of signing another goalkeeper from the Bundesliga, and fans are not impressed.
According to Spanish publication Marca, the Gunners are in advanced talks with Borussia Monchengladbach to sign Yann Sommer for £26m.
Robbie Lyle, who runs YouTube channel ArsenalFanTV, revealed both Barcelona and Liverpool have also shown interest.