The 22-year-old was thought to be on his way to the Emirates Stadium over the summer, but Arsenal's proposed offer for Aouar came up short and the midfielder ultimately stayed put in Ligue 1.
While the Gunners bolstered their engine room with the signing of Thomas Partey - who is now sidelined through injury for a number of weeks - Arsenal were understood to be plotting another swoop for Aouar in 2021.
However, the France international has affirmed that he is loving life in France and wants to help Lyon achieve their goals this season, telling RMC Sport: "I do not see how I could be unhappy in my city, in my club. That is something that I do not understand (rumours that he is unhappy at Lyon).
"I am very happy to be here, I took the decision to stay with the club that formed me, I savour every day I have here. Everything that I want, is to put this club back in its rightful place with my teammates.
"I am very happy to be here, we have an enormous amount of ambitions for this season."
Aouar has been a key player once again for Lyon this term, but the Arsenal target was left out of Rudi Garcia's squad to face Reims after allegedly refusing to take part in a post-match training session following their win over Angers. body check tags ::