The England international was always expected to commit his future to the club despite interest from the likes of Manchester City and Liverpool.
Saka, 21, has scored nine goals and made eight assists in 23 Premier League games this season and is widely regarded as one of the best young players in Europe.
He impressed at the 2022 World Cup in Qatar and has produced consistent performances for club and country over the past year.
Ealing-born Saka, who joined Arsenal’s famed Hale End academy at the age of seven, wants to stay in north London with only a few details left to be ironed out before he signs a new deal.
“I really feel at home at Arsenal. I feel the love from my team-mates, from the coaches and from the fans,” said Saka at the start of the season.
“The manager is always there for me and the different bits of advice he gives me are special.
“The atmosphere at the Emirates is getting better and better and I can feel the energy boost from the crowd every time I play.
“We’re loving every minute of it and we feel a stronger team as a result of that support.”