Arsenal look poised to land the biggest deal on transfer deadline day after agreeing a fee with Real Madrid for playmaker Mesut Ozil, Press Association Sport understands.

It has been a frustrating summer for the Gunners, who have failed to complete any big-money moves, despite heavy interest in Gonzalo Higuain, Luis Suarez and Yohan Cabaye among others, yet they are on course to smash their transfer record should Ozil complete his move to north London.

The 24-year-old is now set to discuss personal terms over the proposed transfer, believed to be a club-record bid of 50million euros (£42.2million), and then look to complete a medical ahead of the 11pm transfer deadline.

For a brief period on Monday morning, Barclays Premier League rivals Manchester United were rumoured to be planning to hijack the move but that was dismissed out of hand.

United manager David Moyes is yet to make any significant additions to his squad since replacing Sir Alex Ferguson, but could still return with an improved offer to former club Everton for left-back Leighton Baines and midfielder Marouane Fellaini, while Athletic Bilbao's Ander Herrera has been another late target, although his club coach Ernesto Valverde does not envisage the player leaving Spain.

Moyes suffered his first competitive defeat on Sunday at rivals Liverpool, who continued their recruitment drive with the loan signing of Chelsea forward Victor Moses.

The Reds snapped up defensive duo Tiago Ilori and Mamadou Sakho from Sporting Lisbon and Paris St Germain respectively on permanent deals this morning before bolstering their forward line with the capture of Moses from Premier League rivals Chelsea until the end of the season.

Stoke have brought in Austrian striker Marko Arnautovic from German club Werder Bremen, while West Brom have confirmed a season-long loan deal for Marseille midfielder Morgan Amalfitano.