Arsenal have been linked with the 23-year-old striker.
Gazetta World reported this week that Arsenal were weighing up a £46 million bid for the Inter Milan hitman after their interest in Napoli's Gonzalo Higuain went cold.
Fans of the North London club have been crying out for a striker in recent seasons but they have been forced to persevere with Olivier Giroud, who has his uses but the Frenchman is also fiercely inconsistent.
Liverpool legend Nicol feels that Icardi is a much better option than Giroud and believes manager Arsene Wenger will make it happen - but only if he is prepared to put his hand in his pocket and spend money.
"As far as the player is concerned I think he fits Arsenal perfectly," Nicol told ESPN. "The guy scores goals. He's a sniffer in and around the box. He's pretty much everything that Giroud's not. I think this will happen if Arsenal put their hand in their pocket."
Icardi is not as prolific as Higuain, having only netted 16 times in 33 Serie A outings last term, but the Argentine is five years younger and there is an expectation that he could blossom into one of the world's finest marksmen.
But the deal appears to hinge on whether Wenger is ready to invest that level of money in a player who has never played in England before.
Of course, he has signed Mesut Ozil and Alexis Sanchez from Real Madrid and Barcelona in recent years, but the notoriously-frugal French manager seldom spends big.