The Gunners are working on a budget and have apparently looked to Germany as a hive of reasonably priced talent, report Bild.
Demirbay is a Borussia Dortmund youth product but never played for BVB, and since then the 25-year-old has cut his teeth in the Bundesliga with a number of clubs.
The 25-year-old has four goals and eight assists from midfield this season, and has turned out five times in the Champions League for Hoffenheim this term.
Demirbay is German-Turkish, like the Gunners' highest earner Mesut Ozil, and has won two caps for Die Mannschaft since 2017.
Arsenal will reportedly face competition from Galatasaray and Besiktas for Demirbay, who has a €30m release clause.
READ MORE...
The 8 most disappointing Premier League players of 2018/19
7 brilliant teams pulled apart before they could fulfil their potential
‘He instantly popped into our ratings as one of the best U21 midfielders in Europe. The impressive thing is Slot has made him into more of a no.6' Inside Ryan Gravenberch's transformation at Liverpool
‘I don’t think Liverpool would look at Ollie Watkins, a striker isn’t a pressing issue for them – it’s Arsenal who need one’ Former Reds star explains why his old club don’t need an out-and-out forward this summer
