Liverpool, Manchester City, Tottenham and Bayern Munich are all closely pursuing the Canadian winger but it is understood they have been told that Arsenal have now jumped to the top of the queue.
Arsene Wenger is a big admirer of the pace, creativity and versatility of Hoilett, who is available on a free transfer at the end of the English Premier League season when his Blackburn contract expires.
The Arsenal manager has identified the 21-year-old as a prime target in his club’s post-season transfer plans after holding off from making a formal move in January when Hoilett came close to joining Spurs for £7 million.
Rovers accept that Hoilett, who joined their academy at the age of 13, will not sign a new deal for the third-bottom side in the Premier League.
Spurs led the race to sign Rovers’ most influential attacker, who has contributed three goals and six assists in the league this season, in January but were unable to agree a deal to offload Steven Pienaar to Everton on loan until the final minutes of the window.
Arsenal have made their interest clear to the player, who is represented by his father, and have been extremely encouraged by the signals they have received from the Hoilett camp.
The winger fits into the club’s recruitment model of buying principally young players with sell-on potential and he is even more attractive to Arsenal because there will be no transfer fee involved.
The club are aware they allowed themselves to be too distracted by the Cesc Fabregas and Samir Nasri situations last summer and have privately vowed to be far more active in the early weeks of the forthcoming window.
Wenger’s pursuit of Hoilett could have repercussions for the future of Theo Walcott, who enters the final year of his Arsenal contract next season.
Arsenal sources insist discussions with the England international are ongoing and there is no strict timetable to come to an agreement but the club’s bargaining position is weakened the longer the player’s long-term future remains unresolved.