The Gunners manager is considering ending his 18-year reign if his team does not finish in the top four of the Premier League and win the FA Cup in the final month of the season.
Wenger has told friends he is considering bringing an end to his 18-year Gunners reign if they do not win the FA Cup and finish in the top four of the Premier League.
The bombshell has been delivered in recent days and is the firmest indication yet that the club's longest-serving manager could abruptly leave within four weeks.
It would be a huge blow to Arsenal chiefs, who agreed a two-year contract extension with Wenger as far back as last October and have continued to give the Frenchman their unwavering support.
Goal understands that the board has begun exploring several 'short-term' contingency plans in the event that Wenger calls time on his tenure.
Chief executive Ivan Gazidis said in January that the hierarchy were "comfortable and relaxed" about the fact the manager's deal was due to expire in the summer. "Arsene will be extending with us. And at the right time we will make that announcement," said Gazidis.
However, Wenger is believed to have been struck by the toxic atmosphere in the stands in recent times, as Arsenal supporters grow restless at the nature of defeats against the Premier League's elite clubs on top of the nine-year trophy drought.
There have been a series of occasions in the last six months when there has been a signal from within the club that Wenger was about to formally sign the new 7.5 million-pound-a-year contract that has remained on the table.
But each time the manager made a U-turn and put his future beyond this season on hold.
The results of the last four matches of the season, which culminates in the FA Cup final against Hull City on May 17, are now set to determine whether the Frenchman formally commits to a deal that would extend his reign to a remarkable 20 years.
As reported by Goal last week, those closest to Wenger had remained in the dark about the manager's intentions following a series of catastrophic performances which had left Arsenal's attempts to qualify for the Champions League in major jeopardy.
However, Wenger’s mood has improved of late, particularly in the wake of consecutive league victories over West Ham and Hull, both of which were relatively comfortable. He is said to be confident that his dual ambitions will be achieved over the next month and he will sign on for two more years.
Moreover, the board is continuing to plan under the proviso that Wenger will be in command next season, with the club whittling down their priority transfer target list, finalising scouting reports and holding meetings with agents. Equipment has also been bought for the training ground, with the manager fully involved in all the key decisions.
The uncertainty has repercussions for his backroom team, who have also been offered new agreements that mirror those of the manager and run until 2016.
The key assistants include Boro Primorac, assistant manager Steve Bould, first-team coach Neil Banfield, goalkeeper coach Gerry Peyton and fitness coach Tony Colbert.
Senior medical and technical staff have also agreed deals that run until 2016, while more junior members of Wenger's backroom team are on 12-month rolling contracts.
It is understood the agreements are all in place and only need to be formally rubber-stamped but Primorac, Colbert and Peyton are all likely to leave should Wenger make the shock decision to call time on his Arsenal tenure.
Should a change need to be made at the helm, it is expected that the appointment would be regarded as relatively short-term.
Wenger gave his squad two days off following Sunday’s win over Hull and is believed to have had a short break in Paris.
The players will return to training at London Colney on Wednesday morning as they begin preparations for Sunday’s home match against West Brom.