The 16-year-old's move was confirmed by his father, with the Northern Irish Premiership side set to receive a modest fee as compensation for his development and training.
Blayney is set to join Arsenal after impressing during a trial, with Liverpool among the clubs to miss out on the teenager's signature.
Arsenal also beat Nottingham Forest to the goalkeeper, who is yet to sign his pre-contract agreement, though only formalities are understood to remain.
The youngster is set to sign his deal ahead of turning professional on his 17th birthday in November 2027, his father Alan Blayney disclosed.
"Everything has been agreed with Arsenal, he just needs to sign the contract. When he's 17, he will sign a professional contract."
Blayney Snr added to the Belfast Telegraph that the timing of any formal pre-contract would be managed carefully.
"It's done and dusted and a pre-contract will be signed when the time is right."
The young goalkeeper had previously trialled with Arsenal earlier this year, while also spending time at Liverpool's training facilities, and was photographed wearing the Merseyside club's training kit in the stands at Anfield.
Despite that earlier interest from Liverpool, Blayney's father explained how Arsenal's proposal stood out above the rest.
"Phoenix enjoyed being at Arsenal, he felt a connection there and really likes the coaches. One of his good friends Daniel McCarron has joined the club and that's probably one of the reasons too. Him and Daniel play in the same Northern Ireland team."
Arsenal have continued to make significant efforts to recruit promising young talent from Northern Ireland in recent months.
Cliftonville teenager Riley McCreery has also been invited to trial with Arsenal, in a further sign of the club's growing interest in the country's youth pathway.
The Gunners have already added Daniel McCarron and Ceadach O'Neill to their academy ranks from Northern Ireland in recent times, with Blayney set to become the latest addition from the region.
For Blayney, the move represents what his father described as a major opportunity, with the player set to continue his development in north London over the coming seasons before any decision is made on his path to senior football.
Arsenal's goalkeeping department has undergone significant investment in recent years, with the club regularly adding to its ranks at both senior and academy level as it looks to build long-term depth in the position.
McCreery's invitation to trial with the club suggests that interest in Northern Ireland's emerging talent is unlikely to end with Blayney's arrival, with scouts continuing to monitor prospects across the country's domestic leagues.