AC Milan have made an offer to take Arsenal midfielder Lucas Torreira on loan for the next two seasons, but the Gunners are eager to strike a permanent deal.
The Rossoneri are thought to be desperate to land Torreira as part of their preparations for next season's Europa League, and Arsenal are said to be looking for £45m to allow the Uruguayan to leave the club.
According to Mediaset, Milan's opening offer is a two-year loan deal which would cost the Serie A side up to €8m, whilst they also want the option to make the move permanent at a total cost of €38m (£34m).
Arsenal have told Milan that they are prepared to negotiate the deal, but they are looking for Milan to commit to buying Torreira permanently at the end of the two years, instead of their offer of just the option to sign him.
With Milan pushing to appease UEFA's Financial Fair Play regulations, they are looking for a way to recruit as many signings as possible, so loan deals are looking likely for Marco Giampaolo's side.
Arsenal are reluctant to sell Torreira, but his recent comments about struggling to settle in England could force their hand, with the 23-year-old thought to be keen on a return to the Serie A.
This has convinced Milan that Torreira could be available this summer, and Arsenal are seemingly not prepared to stand in his way, fearing that his unhappiness could grow into a serious problem in the dressing room.
New executives Paolo Maldini, Zvonimir Boban and Frederic Massara are all working together to bring in a new-look midfield in Milan, with Jordan Veretout and Dani Ceballos both on their wish list, alongside Torreira.
However, to sign all these players, Milan will likely need to sell several members of their squad, with Franck Kessie, Suso, Gianluigi Donnarumma and Patrick Cutrone all tipped to leave the club this summer.