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The German playmaker has entered the final year on his current deal and appeared to be involved in a stand-off with the Gunners.
But the 28-year-old is now ready to extend his stay at the Emirates after the club offered him a £280,000-a-week salary, according to The Sun.
It is claimed Ozil, who joined Arsenal in 2013 from Real Madrid, was holding out for £350,000-a-week but has decided to compromise with a shortage of serious offers from other clubs.
Wenger, who signed a two-year contract extension earlier in the week, is also determined to secure Alexis Sanchez’ services as the Chilean continues to be linked with a summer move.
Premier League rivals Manchester City and Chelsea have expressed interest in the 28-year-old but Bayern Munich are said to be in pole position to clinch a deal.