Alex Oxlade-Chamberlain seemed to be on the verge of joining Chelsea on Tuesday when the Premier League champions reached an agreement over a £35m fee with the Gunners.
However, it swiftly emerged that the 24-year-old England international rejected a switch to Stamford Bridge because he preferred moving to the Anfield outfit.
Now, it has been reported by BBC Sport that Arsenal have accepted a £40m bid from Liverpool after learning that Oxlade-Chamberlain has no intention of signing a new contract at the Emirates.
As a result, Liverpool have dropped interest in Monaco midfielder Thomas Lemar, who was initially wanted by Arsenal until the Ligue 1 giants made it clear that they did not want to sell.
Oxlade-Chamberlain could become Liverpool’s fourth signing of the summer following Dominic Solanke, Mohamed Salah and Andrew Robertson.