Arsene Wenger
Arsene Wenger is set to overhaul his Arsenal squad after the club failed to qualify for the Champions League Getty Images

Arsenal manager Arsene Wenger could be given in excess of £150m ($190m) to spend on transfers this summer after he agreed to extend his stay at the club by two more years, reports say.

The Daily Mirror claims AC Milan striker Carlos Bacca, Leicester City winger Riyad Mahrez and Monaco midfielder Thomas Lemar are all on Wenger's transfer wish-list.

The Frenchman is also reported to be keeping tabs on Malaga duo Pablo Fornals and Sandro Ramirez.

Meanwhile, several players are expected to leave the Emirates Stadium in the summer after a subpar season which saw Arsenal fail to qualify for the Champions League for the first time in 20 years.

Jack Wilshere, Wojciech Szczesny, Joel Campbell, David Ospina and Kieran Gibbs are among those who could be shipped out.

Wenger, 67, is set to sign a new two-year deal to extend his stay at Arsenal until 2019, with an official announcement expected from the club on 31 May.

The Frenchman, who joined the Gunners in 1996, had faced calls from some sections of the club's supporters to step down at the end of the season.

Former England striker Gary Lineker said Arsenal were lagging behind their domestic rivals and could struggle to attract top quality players to the Emirates this summer without Champions League football on offer next season.

"Without the Champions League, the only way is if you can compete salary-wise to attract the players," he told BBC Sport.

"Chelsea bought the best player available last season in N'Golo Kante and Arsenal went for him too but came nowhere near the salary that Chelsea pay.

"So the board has to be realistic and say: Are we going to compete at this level?

"They cannot compete with Manchester United, or Chelsea with all the money [owner] Roman Abramovich has, or [owner] Sheikh Mansour has at Manchester City – these are clubs who can manage to go into huge debt."