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Mikel Arteta had identified the 21-year-old as his priority target to replace Pierre-Emerick Aubameyang, whose future at the Emirates appears to be over after he was stripped of the captaincy.
Arsenal submitted a £50.1m bid for the Serbian earlier this month and offered Lucas Torreira in part-exchange.
However, Vlahovic’s desire was to remain in Italy and Manchester City was his preferred choice if he was to leave Serie A.
But Vlahovic has got his wish of remaining in Italy, with Gianluca Di Marzio reporting that Juventus have agreed a £67m deal for the striker.
While some details – such as the installment period of the transfer – are still to be ironed out, Juve have agreed the fee with Fiorentina and expect Vlahovic to put pen to paper on a four-year deal later this week.
Arsenal are now exploring alternative targets, with Real Sociedad’s Alexander Isak a potential option.
Real Madrid have offered Luka Jovic to the Gunners but it’s unclear if Arteta would sanction a deal for the 24-year-old, who is an international team-mate of Vlahovic.
The Gunners have failed to score in the last four matches, underlining the side’s need to sign a new centre forward.
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Source: Metro Sport