The Gunners had agreed their own terms with the Argentine, but after failing to settle a fee with the Spanish giants, they are set to be trumped to his signing by the Italian club
Arsenal are set to miss out on Gonzalo Higuain after the Real Madrid striker agreed a mammoth contract with Napoli, Goal has learned.
The Serie A club had already settled a £31.8 million fee with Madrid for the transfer of the Argentine, but image rights threatened to derail negotiations over personal terms.
However, those issues were resolved during negotiations on Tuesday and it is understood that Higuain will now pen a five-year, £140,000-per-week contract worth £36.4m in salary alone. The 25-year-old will more than double his comparatively modest £64,000-a-week wage at Real.
Lawyers for both parties will now begin examining the paperwork as Higuain's move to Napoli comes close to completion.
New manager Rafael Benitez team targeted Higuain for the vacant senior centre-forward role in the team after selling Edinson Cavani for £55m to Paris Saint-Germain last week.
Naploli have already bought two players from Madrid this summer alone, with defender Raul Albiol and attacker Jose Maria Callejon transferring from the Santiago Bernabeu for the San Paolo, while Dries Mertens, Pablo Armero and Rafael have also joined Benitez's new-look team.
Arsenal had been confident of wrapping up a deal for Higuain earlier this month after agreeing a contract for the striker with a starting salary of £100,000-per-week.
But the Gunners' attempts to finalise a deal with Madrid hit the buffers after the Liga runners-up resisted an improved £23.1m offer.
Arsene Wenger has since turned his main focus to signing Liverpool striker Luis Suarez after learning the Uruguayan was interested in a move to Emirates Stadium.
As revealed by Goal, the Londoners lodged a second offer worth £42m on Monday, made up of £35m up front and supplemented by a potential £7m of add-ons.
Wenger recently claimed that the club could afford to pay Wayne Rooney's wages should the striker leave Manchester United, but a move for Suarez has become the Frenchman's priority.