The Gunners are unlikely to match the wage demands of the Real Madrid star.
The Germany World Cup winner wants a basic salary of £200,000-a-week topped up by bonuses from his next club.
Khedira will be a free agent at the end of the season and is weighing up his next move as he prepares to leave Real Madrid, who are not now expected to offer him a new deal.
Chelsea and Manchester United are among the clubs monitoring the situation of the midfielder, who turned 28 earlier this month.
Arsenal made enquiries for Khedira last summer, when they would have needed to pay a £20million transfer fee, and have again been in contact with the player’s representatives in recent weeks, but a deal is unlikely unless he significantly reduces his wage expectations.
Khedira wants a contract that would make him comfortably the highest-paid player at Emirates Stadium and smash the wage structure in place for the club's A-list players. The top earners are Mesut Ozil and new signing Alexis Sanchez, who both earn a basic £130,000 per week.
Arsene Wenger wants to make a major midfield signing this summer and he is likely to explore alternatives to Khedira, with Southampton's Morgan Schneiderlin and Sporting Lisbon’s William Carvalho among those on his target list.