The 19-year-old striker is out of contract at the end of the season and speculation over him leaving the club has been persistent.
Several clubs have been on alert with regards to Balogun due to his contractyal situation and his representatives have held talks with a number of teams inside and outside England.
There was a feeling that could be on his way out of Arsenal, but it seems the Gunners have turned things around in the negotiations.
He is set to extend his stay at Arsenal after Mikel Arteta managed to convince the young forward to continue at the Emirates.
The representatives of the England Under-20 striker have been in talks with Arsenal and a new deal is close to being agreed.
The two sides are finalising the details of the agreement and he is expected to sign the new deal soon.
Balogun has made five substitute appearances for Arsenal and has two goals to his name for the first team.
