Although Dortmund are attempting to close the deal, Fresneda has not yet made a decision over his future stop.
According to reports, Arsenal has 48 hours to decide whether or not to pursue Ivan Fresneda in January.
Borussia Dortmund has jumped ahead of Arsenal in the race to sign the 18-year-old Real Valladolid star.
Arsenal and Dortmund have agreed a €15 million (£13.1 million) fee with Valladolid for the right-back, with both sides agreeing on personal terms.
The decision is now in the hands of Fresneda, who has shone in La Liga this season, but according to Marca, the full-back is leaning towards a move to Germany.
Arsenal, on the other hand, is not out of the running yet and is said to have ’24 to 48 hours’ to decide how to proceed in negotiations.
Dortmund is pushing hard to complete the deal, but Fresneda has yet to decide on his next destination.
Valladolid want Fresneda loaned back to the club if he leaves in the January window, which Dortmund are said to be discussing.
Fresneda is said to be unconcerned about which club offers him the highest salary, with first-team football being his top priority.
Arsenal are looking for a replacement for Cedric Soares, who is expected to join Fulham before the transfer window closes.
Takehiro Tomiyasu is the club’s first-choice option in that position, but due to injuries this season, Ben White has been deployed down the right on a regular basis.
Arsenal have made two signings this month to bolster their title challenge, with the Gunners leading the Premier League by five points with a game in hand over second-placed Manchester City.
Jakub Kiwior completed his move to north London on Monday, joining from Spezia in a £20 million deal. Leandro Trossard has also joined the club in a £27 million deal from Brighton.
Mikel Arteta’s side will play Pep Guardiola’s City in the FA Cup fourth round on Friday.