The 19-year-old, who arrived from Barcelona's acclaimed youth ranks in 2005, has been capped by Spain at U17, U19, U20 and U21 level, but has so far made just two Premier League outings for the Emirates Stadium outfit.
The diminutive playmaker, who has been tipped to one day succeed current Gunners' skipper Cesc Fabregas at the North London club, has previously spent a loan spell in Spain with Real Sociedad, where he made 14 appearances.
But despite reports suggesting the youngster was set to join Spanish Segunda Division side Levante on loan to continue his development, Merida's agent Joseba Diaz has revealed the midfielder will be given the opportunity to impress at Arsenal instead.
"Wenger has spoken with Fran and was very clear with him," he said.
"The season will be very long and he could be needed at Arsenal, so there is no chance of a move."
And Merida himself has revealed his delight at being given the chance to shine on the big stage - something he will be going all out to do.
"The fact that the coach wants me to stay has given me a lot of confidence and that is very important for me," he told Radio Nou.
"From this moment I will be giving my all to earn an opportunity in the first-team."
NEWS: Merida set to move to Levante on loan
NEWS: Merida set for Arsenal talks
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