Arsenal have been dealt a huge blow after RB Leipzig confirmed they will hand a fresh contract to transfer target Lukas Klostermann.

The Gunners were connected with the 23-year-old right-back after allowing Stephan Lichtsteiner to depart the Emirates on a free transfer.

However, budget constraints saw the Spanish head coach Unai Emery target other areas of his roster instead.

But with Hector Bellerin yet to make a PL appearance this season, it was said that the club were preparing to move for Klostermann in January window.

But with Atletico Madrid also understood to be interested, RB Leipzig are set to take action by rewarding German star with an improved deal.

Sporting director Markus Krosche told a German outlet Bild: “We have said that we would like to extend Klostermann’s contract, and we are in talks.

“But we don’t feel any pressure. It’s important for me that you talk to the boys early enough for them to have time to think about it.”

The Gunners are keen on strengthening other areas of their team too.

It’s said that Unai is keeping tabs on Trabzonspor keeper Ugurcan Cakir, who is also being watched by Liverpool, Tottenham and Newcastle.

And playmaker Kai Havertz will seek negotiations with Germany boss Joachim Low as he mulls his long-term future at Bayer Leverkusen.

La Havre sensation Tom Cadoche is set to be at the heart of a transfer tug-of-war between Arsenal and Manchester United.