Morgan Schneiderlin, who has been ruled out for the rest of the season with a knee injury, is one option and Southampton value the Frenchman at around £25m. Chelsea have also watched Schneiderlin and Tottenham Hotspur hold a long-term interest.
Gundogan is a player Arsenal scouts have admired for some time and would perfectly fit the role manager Arsene Wenger wants to fill, as he is both tenacious and creative.
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The German international suffers from spondylolisthesis, a deformity in his lower back that can lead to hamstring injuries, and he was sidelined for over a year.
But since the winter break, Gundogan has eased fears over his long-term fitness by starting 16 of Dortmund’s 18 games and has produced some impressive performances.
Dortmund confirmed on their official Twitter feed on Thursday that Gundogan “has decided not to renew his contract.”
Borussia Dortmund und Mittelfeldspieler @Guendogan8 werden nicht über den 30. Juni 2016 hinaus zusammenarbeiten. pic.twitter.com/ONvIdZesCf
— Borussia Dortmund (@BVB) April 30, 2015
With a midfielder poised to come into the Emirates during the summer, Arsenal will allow Mathieu Flamini to leave the club and have warned club captain Mikel Arteta that he will no longer be a guaranteed starter.
Arteta has been out with calf and ankle injuries, but is due to sign a 12-month extension to his contract that is due to expire at the end of the season.
Mikel Arteta has been warned he will not be a first-team regular next season
Arsenal are happy for the Spaniard to stay, but have also told the 33-year-old he can no longer be sure of a regular first-team place and that his role will be that of an experienced squad member.
Other than trying to sign a midfielder, Arsenal are interested in Chelsea goalkeeper Petr Cech and are also considering their options in case Theo Walcott does not sign a new contract.
Right-back Mathieu Debuchy is set to miss Arsenal’s game against Hull City on Monday night after suffering a hamstring injury in training. The Frenchman has made only 10 League starts this season after undergoing ankle and shoulder operations.
Arsene Wenger is looking to strengthen this summer
Wenger said: “Everybody is in good shape, apart from Mathieu Debuchy, who has a little hamstring problem. Monday could be too early for him.
"He got the injury in training. We don’t know how bad it is. Apart from that everybody should be available [for the Hull game].”
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Despite Debuchy’s injury, Wenger has a strong squad to pick from for the trip to Hull and added: “We are at a period of the season where it’s going to be important to have everybody on board and to see everyone fit makes us stronger.
"We are on a good run, we want to keep it going and the fact that we have plenty of [selection] opportunities is very interesting for me.”
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Wenger has also revealed that he used to have a “firebomb” temper, but claims to have mellowed as a manager – despite his touchline clash with Jose Mourinho this season.
The 65-year-old had had high-profile bust-ups with Alan Pardew and Martin Jol in the past, and shoved Chelsea manager Mourinho on the touchline at Stamford Bridge in October.
Arsene Wenger and Jose Mourinho square up at Stamford Bridge
But Wenger insists he has now calmed down and said: “I was an absolute firebomb, I was absolutely mad! You learn to express your ideas better with time, to anticipate problems better than you [used to], so you are not so surprised as when you are young.
“You take a bit more distance with what is happening. At a club like Arsenal you could not exactly behave like I behaved at the start.
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“I have learnt to dominate my devils. I am not sure I have mellowed in my resolute attitude, but in the way I express my feelings and beliefs, certainly I have changed.”