Arsenal's failure to lure established players to the Emirates this summer looks set to continue as reports from Germany suggest Bayern Munich midfielder Luiz Gustavo has agreed to join Wolfsburg.

The Brazil international feels he has little choice but to leave the Allainz Arena this summer with his role under Pep Guardiola under scrutiny as the midfielder aims to ensure he is selected for the Brazil squad for next summer's World Cup.

Bundesliga outfit Wolfsburg have been eager to sign Gustavo since his position at Bayern became untenable earlier this summer, but Arsenal's interest has grown in the past days, culminating in the 26-year-old announcing he would like the play for the north London club.

However, German newspaper Die Welt report that the Brazilian has opted to remain in Germany, and will sign a long term deal with Wolfsburg in the coming days.

If reports prove to be accurate, it will come as a bitter blow for the Gunners who appeared to be favourites to sign Gustavo for a reported fee of £14m.

"My contract with Bayern runs until 2015 but it is very important that I play first team football to keep getting called up for Brazil," Gustavo said earlier this week.

"Arsenal play a very attractive brand of football and are in the Champions League. They also have a very clever manager in Arsene Wenger.

"Even when Bayern beat them in the last Champions League you could see they are not pushovers."

Another snub could prove to be detrimental to Arsene Wenger's preparations ahead of the new season. The club encountered a similar situation in June in their prolonged pursuit of Real Madrid striker Gonzalo Higuain.

Despite appearing poised to sign the Argentine on more than one occasion, complications over a fee saw Napoli move in and sign the 25-year-old ahead of the Gunners.

With Abou Diaby's absence through injury to continue until January, Wenger would appear to still be looking at adding some steel to his midfield, but may have to now consider other options.