Arsenal and Manchester United have been put on alert after Borussia Dortmund sporting director Michael Zorc confirmed that the club will take a decision on Henrikh Mkhitaryan this week. The midfielder is likely to leave the Bundesliga club after rejecting an offer of a new deal and extend his stay beyond the summer of 2017.

The club are unlikely to want to lose the midfielder on a free transfer next summer, and hence will sanction the transfer if interested clubs meet their valuation. Arsenal were said to be in pole position to sign the prolific Armenia international, who scored 23 goals and made a further 32 assists in all competitions last season. However, according to the Daily Mail, the Red Devils have also entered the race and are willing to pay the €30m (£24m, $34m) fee that the German club will demand.

Mkhitaryan's agent had made it clear that they are looking at options when he rejected the new offer from Dortmund, and with a number of clubs interested, the club's sporting director is keen to resolve the issue, so they can go about finding a replacement.

"We will make a decision this week," Zorc said, as quoted by German publication Bild.

The north London club will have one advantage over their Premier League rivals, which is Champions League football – as the Old Trafford club failed to qualify for Europe's elite club competition. Moreover, the Armenian midfielder had revealed his admiration for Arsenal and Arsene Wenger at the start of his career, which could play a part as well.

However, the Gunners are likely to be beaten when it comes to spending power and the wages that United can offer the player, while they also have a better relationship with his agent, who also manages Paul Pogba and Mkhitaryan.