Arsenal have been told by Inter Milan that they must submit a bid in the region of €90 million (£76.8m) for Lautaro Martinez should the Gunners wish to engage in any further negotiations for the Argentine's services, report Tuttosport.
Mikel Arteta's side initiated talks with Nerazzurri to propose a deal that would see Alexandre Lacazette swap the Emirates for the San Siro in a player plus cash deal.
However, despite Inter already selling Achraf Hakimi to Paris Saint Germain this summer in a deal worth £60 million, the Serie A champions are insistent upon urging cash deals following a difficult financial year due to Covid.
In light of this development, Atletico Madrid have entered the race to sign the 2021 Copa America winner rivalling the Gunners' pursuit and have tabled an opening offer of €35 million (£29.9m).
The Nerazzurri declined Atletico's opening bid but Diego Simeone's side remain firmly in the front seat according to report resultant of the Spanish side's ability to submit a cash deal.
Martinez, who scored 17 goals across 38 Serie A games last season, could still find himself gracing the Emirates next season following Inter's difficult economic climate, acknowledging that they are in no position to decline substantial offers this summer.
The 23-year-old striker, whose contract expires in 2023, has changed agents since his arrival in Milan and has been pushing for a newly improved deal opening the door for Edu to pounce on the stretched tensions between the two parties.
According to Tuttosport, former Lazio and new Inter boss Simone Inzaghi has been preparing for life at the San Siro without Martinez by beginning talks with former striker Joaquin Correa.
Despite, Atletico's early advances Arteta could prize the the striker to north London should Edu secure a windfall from the sales of Lacazette, Granit Xhaka and Hector Bellerin - all of whom have been teasing moves away from the Premier League.
Should Martinez join the Gunners this summer, the Argentine could prove to be the fuel to reignite Pierre-Emerick Aubameyang's past pastures.
The forward united with Romelu Lukaku last season under Antonio Conte and the pair's partnership was instrumental to Inter finishing the season victorious.
Martinez, who recorded ten assists in the Serie A last season, often dropped deep in between the lines receiving the ball in pocket of space, which could unlock Arteta's dream free-flowing strike force this forthcoming season.
Do you want an exclusive pre-season Arsenal preview - both in your inbox and through your letterbox? Head over here to find out more and secure your copy!
