Arsenal boss Unai Emery is on the verge of acquiring the Real Madrid ace on a season-long loan.
Negotiations are currently ongoing, though both parties are said to be at an impasse over who will pay the 22-year-old’s wages.
Tottenham were also interested in bringing the Spain international to north London but have turned their attention to signing Real Betis’ Giovanni Lo Celso, who they’re planning to splash out £70million on.
And according to The Mirror, Spurs ended their interest in Ceballos as he has no intention of leaving the Bernabeu on a permanent basis.
They claim Spurs didn’t want Ceballos to use their interest in him in order to secure a new long-term deal with the Spanish giants if he impresses on loan in north London.
Emery was about Arsenal’s interest in Ceballos earlier this week but refused to be drawn on the matter.
He said: “I don’t want to speak about the names but Ceballos is a very good player.”
Arsenal have so far only signed one player this summer, bringing in 18-year-old Brazilian Gabriel Martinelli from Ituano.
Emery is keen to make wholesale changes to his squad this summer and has warned the Emirates brass he needs to bring in a minimum of three quality players before the transfer window closes on August 8.
“Our target is to get three or four players who really improve our squad,” Emery said.
“We are being very demanding about the possibility to sign very expensive players.
“We have very good young players who can progress but we need others to come here to help us.
“We are having a lot of meetings with the club, with Edu and also with Josh and Stan Kroenke in Denver.
“We have a clear idea and that is to sign the players in the positions we need who can help us with big performances.
“We start with our first target and if we cannot achieve that we move on to the second target. But every time it is someone who will improve the squad.”
Arsenal kick off their Premier League campaign on August 11, travelling to St. James’ Park to take Steve Bruce’s Newcastle.