The Gunners academy graduate's future has dominated speculation throughout the summer, with clubs across the Premier League and Europe registering interest, including AC Milan, RB Leipzig, Borussia Dortmund and Fulham.
Nwaneri already spent the second half of last season on loan at Marseille, and Arsenal now view a fresh loan as the best route to the regular senior football they feel he needs.
Attention on his situation intensified after he was left out of the matchday squad entirely for Sunday's Community Shield win over Manchester City, one of several fringe first-teamers omitted amid ongoing transfer uncertainty, alongside Gabriel Martinelli and Gabriel Jesus.
Arsenal accept that Nwaneri is at a stage of his development where regular minutes matter more than staying involved in a crowded first-team squad, but with Bukayo Saka, Noni Madueke, Leandro Trossard, Martinelli, Martin Ødegaard and Eberechi Eze all ahead of him in the pecking order, the club sees little prospect of him playing significant minutes at Emirates Stadium this season.
"I want him to be at the club, but we have to consider in the medium, long term, what is best for the player as well," Arsenal manager Mikel Arteta said, when asked about Nwaneri's situation last week.
Ultimately, his next move will be shaped by what offers Arsenal receive. Only a permanent bid significantly above the club's valuation would prompt a rethink on selling outright, with a loan remaining the preferred and more likely outcome as the window enters its final weeks.
Arsenal have never previously been open to a loan with an option to buy attached, but a straight loan now looks the most likely structure as talks with interested clubs continue.
Nwaneri made his senior Arsenal debut aged 15, becoming the youngest player to appear in English football's top flight, and has continued to be talked about as one of the club's brightest academy prospects despite limited first-team opportunities since.
His loan spell in Ligue 1 last season saw him get regular game time as he adjusted to senior football away from Emirates Stadium, and Arsenal are hopeful a similar arrangement can provide the platform for further development this term.