The Gunners have been watching the Croatian international closely in recent months.
The 24-year-old Croatia international is equally adept in a full-back or wing-back role and he has become one of the most reliable and consistent players in Italy over the past three years.
Vrsaljko arrived in Serie A with Genoa following a reported £3.5 million from Dinamo Zagreb and featured in 22 league games for the north-west club before making the switch to current club Sassuolo.
From there, the defender has become a constant member of Eusebio Di Francesco’s starting XI. According to reports, Vrsaljko is valued at £12 million and has a contract with Sassuolo until June 2019.
Arsene Wenger will be eager to add to his ranks in the coming summer after failing to mount a serious title tilt this season, with Leicester closing in on a famous trophy. Despite Hector Bellerin enjoying a bright season at right-back for the Gunners - and being named in the PFA Team of the Year - the French boss has been linked with another right-footed defender.
It remains to be seen whether Vrsaljko would be willing to take a back-up position with the north London club or whether he would arrive at the Emirates Stadium as direct competition to the Spaniard.