The Gunners are keen on Aouar and have been linked with a move to sign him throughout the ongoing transfer window.
Boss Mikel Arteta has been hoping to land the midfielder, but he started for Lyon against Marseille in Ligue 1 on Sunday night, killing off any talk of a switch to the Emirates Stadium.
Arsenal have been unable to meet Lyon’s asking price for the midfielder and the 22-year-old will stay in France for now.
Aouar, who scored from the penalty spot in the 1-1 draw with Marseille, was asked after the match why he has decided to stay put at Lyon.
He told French TV programme Telefoot: “I felt that I could still bring things to this team.
“I wanted to continue this adventure with the club that raised me.”
Aouar has also been linked with Italian champions Juventus and Spanish giants Real Madrid.
He is set to continue at Lyon for now, however the January transfer window is just 12 weeks away and Les Gones could be tested with offers for his services in the new year.
