Malcom has asked to depart Barcelona but the Spanish giants are demanding €60 million (£54.2 million) from Arsenal to sign the attacker, according to reports in Spain.
Barcelona purchased Malcom for an initial £36.5 million fee from Bordeaux the previous summer. But the Brazilian was not able to secure a regular first-team role in the team and made just 15 matches in La Liga in his debut campaign at Camp Nou.
According to Catalunya Radio, he has now told Barcelona, via his entourage, that he wants to depart the club this summer in order to get more game time.
The report also claims that Gunners have registered their interest but Blaugrana are holding out for a €60 million (£54.2m) transfer fee.
The Gunners, however, are restricted this summer with a kitty of around £45m and are hoping to land Malcom on a season-long loan with an option to buy.
The Catalans are looking to bolster their own funds after spending €120 million (£107m) on landing Antoine Griezmann last week as the club still hold out hope of re-signing Neymar from Ligue 1 giants Paris Saint-Germain this summer.
Arsenal, meantime, are also hoping to seal a season-long loan deal for Real Madrid midfielder Dani Ceballos.
In other news, Arsenal forward Pierre-Emerick Aubameyang has appeared as a transfer target for Premier League giants Manchester United, according to website FC Inter News.
A move for the 30-year-old Gabonese could be to replace Belgium international Romelu Lukaku, who continues to be connected with a move to Serie A giants Inter Milan.