Since the end of last season, Gibbs has been tipped to leave the Emirates Stadium after falling down the pecking order, but interested clubs have struggled to come to an agreement over the player’s valuation.
West Bromwich Albion had been linked with the left-back but according to Sky Sports News, Watford have made a breakthrough and appear favourites to complete the signing.
It has been claimed that a fee has been agreed for the 27-year-old, who will now discuss personal terms with the Hornets and hold discussions with head coach Marco Silva.
Gibbs came through the academy at Arsenal and during his career in North London, the England international has netted six goals in 230 appearances in all competitions.
However, Gibbs featured on just 11 occasions in the top flight last season and with less than a year remaining on his contract, it appears that Arsenal are ready to allow their long-serving player to move elsewhere.