Arsenal have been active in the transfer market trying to solidify their squad ahead of the new season.
It's understood that the Premier League 2020-21 season will begin on September 12 with Arsenal traveling away to face Fulham.
Mikel Arteta has already completed a three deal for Willian from Chelsea on a free transfer.
While Gabriel Magalhaes deal is currently in the pipeline as Gunners set to make an official announcement.
The 24-year-old playmaker spent the 2019-20 campaign on loan at Emirates Stadium from Real Madrid.
Ceballos formed a good partnership with Grant Xhaka in the middle of the park, as he lifted the FA Cup at the end of the season.
Arteta told reporters when asked about his plans for Ceballos: “Well, we have had some talks and Dani knows really well what I think about him.
“He was pretty clear with me as well that his intention was to remain with us, but obviously Real Madrid is involved and I don’t know yet what they want to do with the player."
The Spanish boss added the player wants to stay at Emirates but it's all down to coach Zinedine Zidane whether he still wants the player at Real Madrid.
“But he’s a player that we are interested in because we really saw, in the last few months of the season, what he is capable of bringing to us, ” Arteta added.
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