Arteta previously worked as Pep Guardiola’s number two at the Citizens and is a big admirer of Sterling.
The Arsenal boss had an excellent relationship with the player at City and, according to the Daily Star, now wants to take him to the Emirates Stadium.
Sterling fell out of favour at City towards the end of last season after the emergence of Phil Foden.
The 26-year-old only started seven of the side’s final 12 Premier League games as Guardiola’s men stormed to the title.
And remarkably, Sterling was only named in the starting line-up for two of City’s Champions League games in the knockout stages – although one of those appearances came in the final against Chelsea.
Sterling was instrumental for England at this summer’s Euro 2020 tournament and helped his country reach the final, where they lost to Italy on penalties.
But Sterling has faced disappointment since returning to his club and has continued to be a bit-part player for Guardiola this season.
The player has only started two Premier League games this term – against Tottenham and Southampton – and City failed to find the back of the net in either of those games.
He did start Tuesday’s Champions League defeat to Paris Saint-Germain – but City again failed to score.
Sterling is currently in negotiations about a new contract at the Etihad Stadium but talks are apparently moving ‘slowly’ due to the forward’s wage demands.
The former Liverpool player is thought to be looking for £350,000 a week – £50,000 more than he is currently earning.
And if he can’t thrash out a new deal, Arsenal are one club who would be more than willing to give him a get-out option.
Sterling currently has 20 months remaining on his contract and City could be willing to listen to offers next summer if he doesn’t put pen to paper before then.
The forward was valued at £100million two years ago and City certainly don’t want to see him departing for free.
This week, former Crystal Palace chairman Simon Jordan said the England international needs to leave Man City if he can’t reach the standards required by Guardiola.
“If he’s now in a side where the conventional wisdom is suggesting that his preferred position is now going to be occupied by Jack Grealish, he has one of two decisions to make,” Jordan told talkSPORT.
“Step-up and start to do what is required of you in a position that Pep puts you in, or leave the club.
“Unless there’s going to be a departure from what seems to be the indication that Jack Grealish is going to play in that position, what is Raheem Sterling going to do?”