The new deal comes amidst interest from Lazio, AC Milan and Everton.
According to UK Daily Mirror, Talks between the player and Arsenal started at the end of last season and continued despite the arrival of a new manager Unai Emery.
Although they just met, Emery knows Iwobi well and has personally expressed his interest to the player of them working together, Pulse Sports reported earlier.
Emery wants Iwobi
Sources close to Iwobi expressed high confidence to Pulse Sports over the player’s future at Arsenal under Emery.
Iwobi had to cut his holiday short by one weekon the request of Emery who wanted to the player to be part of the squad for Arsenal’s pre-season tour of Singapore.
The 22-year-old was part of Arsenal’s 25-man squad to flew to Singapore on Sunday, July 22.
Arsenal will play two matches in Singapore as part of the International Champions Cup, against Atletico Madrid on Thursday, July 26 and against Paris Saint Germain on Saturday, July 28.