The 19-year-old, who became the first Manchester United player to represent Gibraltar at senior level, has already earned 24 caps and scored five goals for his country, featuring in World Cup qualifiers and Nations League fixtures.
He joins Arsenal alongside fellow Manchester United academy product Habeeb Ogunneye as part of a double raid on Old Trafford's youth ranks, with both players set to strengthen the Gunners' Under-21 squad.
"It's a pleasure to be here, I can't wait to get started," Scanlon said. "I've been waiting to get this over the line, so I'm buzzing to be here. My family are massive to me, so to have them here for this special day is only going to make it better."
Scanlon pointed to the club's momentum as a key factor in his decision to move across north-west and south-east London.
"I think you can see where the club's at, it's really positive and I think it's only going to get better," he said. "You can see that everyone here is hungrier for more, hungrier to get better and I think that's something I believe I can add to and want to be a part of as well.
"I'm a creative player, I like to score goals, assist, so hopefully I can excite players who watch me, and that's what I'm here to do really."
On the value of his international experience at such a young age, he added: "I think it's massive. Obviously proud to represent my country, but also international football at a young age is only going to improve me as a player, as a person as well. Playing against men week-in, week-out, being part of a dressing room that represents a country is also extremely valuable, so I think it's only going to help me going forward."
Scanlon spent the second half of last season on loan at League Two side Swindon Town, scoring his first senior goal in club football as the Robins finished ninth in the fourth tier.
"It was different to what I've been used to," he admitted, "but just as valuable. Learning how senior dressing rooms are, what the standards are like day-in day-out. What it can be like in a league like League Two, which is not always easy, so it was a massive learning for me, but positive on the whole."
He signed off by outlining his ambitions at the Emirates: "I'm looking forward to playing, representing the badge, improving and hopefully showing people what I can do."