Luiz is in the final year of his contract and Aston Villa have been trying to convince him to sign a new contract with the club.
However, interest from Arsenal on deadline day has turned his head and he is keen to move to the Emirates.
But the Midlands club do not want to lose the player and rejected an offer worth £20m earlier in the day.
Aston Villa are clear that the Brazilian is not for sale but it has been claimed that Arsenal are refusing to back away just yet.
They are prepared to put in a second bid and further test Aston Villa’s resolve of holding on to the midfielder.
The Gunners are ready to push until the end in a bid to secure his signature before the window closes at 11pm tonight.
Signing a midfielder has become a priority for Mikel Arteta after Mohamed Elneny picked up a hamstring injury and even Thomas Partey is struggling with a short-term problem.
It remains to be seen whether they can convince Aston Villa to part ways with Luiz in the coming hours.
