With Pierre-Emerick Aubameyang ineligible and Alexandre Lacazette injured, former Manchester United forward Welbeck starts in a central attacking role.
He will be flanked by Mesut Ozil and Henrikh Mkhitaryan as the Gunners look to end a run of four straight defeats.
Hector Bellerin and Nacho Monreal have both been ruled out with injuries, meaning Calum Chambers and Sead Kolasinac again deputise at in the respective full-back roles.
Aaron Ramsey returns after missing Sunday's defeat to Brighton while David Ospina reprises his role as Arsene Wenger's cup goalkeeper in place of Petr Cech.
Milan are unbeaten in their last 13 matches ahead of the last-16 clash with manager Gennaro Gattuso having revitalised one of the great teams of European football history.
Academy product Patrick Cutrone unsurprisingly starts up front for the Rossoneri, with Suso and Hakan Calhanoglu supporting him from wide areas.
AC Milan XI: G.Donnarumma; Calabria, Bonucci, Romagnoli, Rodriguez; Kessi, Biglia, Bonaventura; Suso, Calhanoglu, Cutrone.
Subs: A.Donnarumma, Zapata, Locatelli, Montolivo, Borini, Kalinic, Silva.
Arsenal XI: Ospina; Chambers, Mustafi, Koscielny, Kolasinac; Ramsey, Xhaka, Wilshere; Mkhitaryan, Ozil, Welbeck.
Subs: Cech, Holding, Maitland-Niles, Elneny, Iwobi, Nelson, Nketiah.