Real Madrid are now willing to let Vinicius Junior leave should no agreement be reached over a new contract.
According to ESPN, sources have confirmed that Real's hierarchy have no plans to improve the latest renewal offer they put to the Brazilian.
Vinicius returns to the Valdebebas training ground on Monday to begin preparations for the new season, his holiday over after the World Cup. Doubts still hang over his future with just one year left on his current deal.
No date has yet been set for a meeting between Real Madrid officials and the Brazil international's representatives, according to the same sources. The club believe the decision now rests with the player himself: sign the new contract or push for a move elsewhere.
A source close to Vinicius, meanwhile, insists there has been no contact with Arsenal so far.
The Gunners are indeed keen on the Brazilian winger, the network explained, and are currently weighing up the feasibility of getting a deal done.
Talks between Real Madrid's board and Vinicius's representatives have been deadlocked for some time over a new contract.
ESPN reported last season that the player was in no rush to renew, and that discussions would not progress until after the World Cup.
Aged 26, Vinicius joined Real Madrid in 2018 and grew into one of the best players in the world. He has scored in two Champions League finals and finished runner-up in the 2024 Men's Ballon d'Or.
Last season proved a frustrating one for the Brazilian under former manager Xabi Alonso. He reacted angrily to being substituted during the Clasico at the Bernabeu, with the team going two seasons without a major trophy.
Real Madrid have kept busy in the current summer transfer market. Forward Carlos Espi joined this week.