Sead Kolasinac is expected to leave Arsenal this summer with Schalke and Serie A side Lazio keen on signing the defender on a permanent deal, football.london understands.
Kolasinac, 27, joined his former club on loan until the end of the season at the start of January where he was immediately given the captain's armband and tasked with keeping the Gelsenkirchen-based side in the Bundesliga.
The left-back was close to joining Bayer Leverkusen on transfer deadline day last year but a move fell through, and it was widely expected that he would leave in January or the summer, with his contract up in June 2022.
However, Schalke's relegation from the top flight for the first time in 30 years, with former Arsenal defender Shkodran Mustafi also part of the defence following his contract termination in January.
Mustafi is among ten players who Schalke announced were leaving the club following the expiration of his contract this summer.
“That is our absolute dream,” Schalke sporting director Jochen Schneider told RUHR 24 when asked if they would like to keep hold of the left-back.
"He’s an incredibly good guy, lives for the club, pushes and pulls the cart. Sead embodies Schalke like no other.
“Of course, it is our wish to keep him until the end of his career and beyond.”
Bosnian international Kolasinac made 78 appearances and scored twice for Arsenal since arriving on a free transfer from Schalke, but found his game time limited due to the emergence of Kieran Tierney.
The Gunners will be in the market for a left-back this summer to compete with Tierney after failing to strengthen the area during the January transfer window, with Ryan Bertrand and Josh Doig both being looked at as potential options.