La Real president Jokin Aperribay is in London for transfer talks with Arsenal over the Spain midfielder.
La Real are seeking €35m plus €5m in add-ons for Merino.
The Gunners are now in advanced talks with Aperribay over the fee for the former Newcastle midfielder.
Aperribay admitted earlier this week: “Mikel already told us that he feels very much like a Real fan, but that if a Premier League team came, he wanted to fulfil his dream. Merino was clear that he didn't want to say he was renewing and then leave.
“Unfortunately, one of the teams we didn't want to show up showed up. When I was in Japan, Olabe (Roberto, Sporting Director) told me that Arsenal had called. I wish it had been earlier or that they hadn’t called at all.
“We will talk to Arsenal and defend the interests of Real Sociedad. When we consider that the offer is good, we will say yes. We know what Merino's wishes are, so we decided not to call him up."