Manuel Locatelli has been one of the top performers for the Italians this campaign after netting two goals in three matches so far.
Locatelli had already been linked with a number of clubs, including Juventus but Sassuolo CEO Giovanni Carnevali revealed the Gunners are ahead of everyone else.
"Juventus are the only Italian club we talked to about Locatelli," Carnevali told Sky Sport Italia,.
"They have interest, we spoke to (director Federico) Cherubini last week. We have not yet discussed the financial details, but we have a good rapport and will talk it over soon.
"It's true that there are foreign clubs interested, including Arsenal, and so far they are ahead and are the only side realistically to have made an important proposal for Manuel."
The Gunnners have been in search of midfield reinforcements after Martin Odegaard and Dani Ceballos return to Real Madrid after their loan spells had ended.
Locatelli finished the 2020/2021 campaign with four goals and three assists for Sassuolo.
