Denilson is to return to Arsenal after his loan club Sao Paulo refused to meet the Gunners' asking price for the player.
The midfielder spent the entirety of last season at the Brazilian side, but they have refused to meet his £4.9m valuation.
Sao Paulo president Juvenal Juvencio acknowledged that Denilson's return to England is almost inevitable, but added that he will attempt to extend the loan.
"Denilson won't stay," he told UOL. "Arsenal want €6million (£4.9million) for him, but we won't pay that so we expect him to leave soon.
"Of course we will try to get the loan deal extended for another year, but it won't be easy."
Denilson was a first-team regular for Sao Paulo last season, making 30 appearances.
