Sportsmail understands the Schalke defender, who will replace Nacho Monreal as the club's first choice left back, will sign a four-year deal.
Kolasinac is set to leave Schalke when his contract expires at the end of the season.
Sky Sports report that Premier League trio Arsenal, Everton and Manchester City - as well as AC Milan - have all offered deals to Kolasinac in the hope of snapping him up in a bargain move this summer.
But Wenger has finally had his say on the speculation and speaking in the Daily Express, he rubbished the claims that his side has agreed a deal with Kolasinac, possibly opening the door for Everton to sign the 23-time Bosnia and Herzegovina worldwide.
'We can deny that story at the moment. The Blues are always willing to pay higher wages than us, and I think they can safely guarantee Champions League football next season, whereas Arsenal will need a miracle to get there this time around....
Kolasinac has spoken to Arsenal about a summer switch to the Emirates, the player's father has confirmed.
Although primarily a left-back, the Bosnia-Herzegovina global can also play at centre-half or as a defensive midfielder.
The move for Kolasinac now looks very much on, but with only one year left on his contract they will have to move swiftly to acquire his services.
That will nearly certainly spell the end for 31-year-old left-back Nacho Monreal who is set to return to Spain.