Arshavin starred for Russia with some fine displays during Euro 2008
Andrei Arshavin's agent has said he is "very confident" the player's move from Zenit St Petersburg will be confirmed by the Premier League on Tuesday.
A Zenit spokesman had said that the deal had fallen through and the 27-year-old was returning to the club.
But agent Dennis Lachter told BBC Sport the deal had been agreed by all parties and only needs to be made official by the Premier League.
"It was completed in extra-time but we must wait for confirmation," he said.
Lachter added that "in 16 years this has been the most difficult transfer ever" without wanting to go into details of the sticking points in the deal.
The clubs had been in discussions over the move for the duration of the transfer window, but the 1700 GMT deadline passed without any official word on the player's future.
It was understood that Arsenal had agreed a fee with Zenit, during which time Arshavin, one of the stars of Euro 2008, accepted personal terms and passed a medical.
The Associated Press and Reuters then claimed the deal collapsed when the clubs could not reach agreement.
Reports said the move broke down over the size of the fee and compensation Zenit would be paid for allowing Arshavin to break his contract.
But later on Monday AP quoted Zenit spokesman Alexei Petrov as saying: "The deal was signed for three-and-a-half years and the financial details will be disclosed tomorrow."
The Agence France Presse agency claimed Arshavin has joined Arsenal "until June 2012 for £12m".
Arshavin travelled to London on Sunday in order to complete the formalities of the move before the transfer deadline.
However, after being pictured in Hertfordshire, key figures in the deal said that Arshavin had left for an airport and the move was off, amidst suggestions that the two clubs differed in their valuation of the player.
BBC Radio 5 Live's Mike Sewell said that another sticking point was Zenit's demands for half of Arshavin's signing-on fee.
Arsenal boss Arsene Wenger has remained hopeful throughout that he would land his man.
"We are always confident, we try our best, if we can find an agreement, we will do it," he said earlier.
"These kind of stories sometimes develop in the last minute on the final day of the transfer window. It is very difficult to predict."
However, he also suggested that the signing of Arshavin, who became a talisman and central figure for Zenit and his country, at Euro 2008, would not alter his faith in the young team at his disposal.
"There is always a danger that people always want a wonder man, but I do not believe in that.
"I believe we have to keep going, and accept that the expectation level on him would be very high."
It is rumoured that Arshavin will take the number 13 shirt previously held by Alexander Hleb, who was sold to Barcelona last summer.