Per Jeorge Bird's Arsenal Youth website, the Gunners are not offering Ryan a new contract.
He joined the club from Chelsea as a schoolboy, earning game time with the Under-18s.
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However, he has not progressed as much as the club may have anticipated.
He is now set to join up with Watford's U21 side, provided his current trial is successful.
Ryan scored three goals and provided three assists for the Gunners' U18s this season.