The proposed match against Mihailo Petrovic's side will take place on Friday July 26 at the Saitama Stadium, which follows shortly after the Gunners' other scheduled clash in the country against Nagoya Grampus on Monday July 22.
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"I am delighted to be returning to Japan where I spent two very happy years before joining Arsenal," Wenger told the club's official website.
"We are very happy to be visiting Saitama this summer after our trip to Nagoya.
"We know that Urawa Reds frequently have large crowds at their J-League matches and the Saitama City Cup has seen top European teams compete against the Urawa Reds in previous summers.
"The match follows our other fixture in Japan against Nagoya Grampus, and we are sure to receive a very warm welcome from our many supporters in Saitama."
The Saitama City Cup will be celebrating its 10th anniversary this season, with previous clubs to compete in it including Manchester United, Barcelona and Inter.