The Malaga left-back has agreed to join the Emirates Stadium outfit on a long-term contract for an undisclosed fee, believed to be in the region of £8.5 million.
Arsenal saw full-back Kieran Gibbs limp off against Liverpool on Wednesday, with the defender set to be sidelined for three weeks.
Replacement left-back Andre Santos has struggled this season, forcing manager Arsene Wenger to move for the experienced Monreal as Arsenal push for a top-four finish.
Wenger told the club's official website: "We are delighted that Nacho Monreal has agreed to join us.
"We have been monitoring him for some time now and are really pleased that we’ve been able to agree this move today. Monreal is a strong left-sided defender with good experience at both club and international level.
"He is a technically gifted player, a good crosser in the final third and strong in the air.
"Monreal will add quality to our squad and of course, to our defensive unit. We all look forward to him playing for us."
The 26-year-old made 127 La Liga outings for Osasuna's first team before joining Malaga in 2011, where he impressed in the same side as Santi Cazorla, who joined Arsenal last summer and has since starred for the North London outfit.
