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Juventus boss Massimo Allegri has been the favourite to succeed Wenger, but the Italian appeared to rule himself out of the running on Sunday night.
Mikel Arteta, the former Arsenal captain, is now believed to be the front runner and has seen his odds slashed dramatically with the bookmakers.
Arteta is assistant to Pep Guardiola at Manchester City and the title winning manager admitted after his side’s win at Southampton that he wouldn’t stand in his friend’s way, should he want to switch the Etihad for the Emirates.
“What we have done this season, Mikel his contribution was outstanding, amazing, we work together so good,” said City boss Guardiola.
“If he stays I will be the happiest guy in the world and if he decides to move because he has this offer, this option, I will not say you do not have to go. I want the best for my friends and he’s a friend of mine.
“If he decides to go, I will be so sad but I will understand his decision because it’s his career, his life, his family, and I am not the right guy to say you don’t have to do that.”