Arsenal have reportedly made progress in their efforts to appoint Mikel Arteta as their new manager.

While it has been widely documented that Arteta is due to replace interim boss Freddie Ljungberg this week, no deal will be completed unless terms can be agreed with Manchester City.

Despite acknowledging that their assistant manager wants to leave for the Emirates Stadium, City are demanding £2m in compensation.

However, according to Sky Sports News, further discussions have taken place, with headway said to have been made between the two parties.

Arsenal had initially hoped to have Arteta in the dugout for Saturday's Premier League encounter with Everton, but the delay in agreeing terms means that is now unlikely.

Nevertheless, the Gunners are still keen to confirm the appointment within the next 24 hours.