Head coach Arsene Wenger wants Modric to sure up the 'Gunners' midfield for next season as the club look to regain their status as one of the Premier League's best teams.
In fact, he's so determined to land the Croatia international that reports in the English media have claimed that Arsenal have already sent several scouts to Madrid to watch the midfielder's movements closely.
The board know that the transfer won't come cheap either and are allegedly willing to pay €60 million to secure Modric's services and make him one of the league's highest-paid players.
However, the 'Gunners' will face stiff competition from their peers as Liverpool and Tottenham are also reportedly interested, as well as Juventus, with Modric seen as one of the best midfielders in football at the moment, providing three assists and scoring twice in this year's campaign.
Nonetheless, Madrid will not want to let one of their star assests go so easily, especially as they are trying to rebuild too after a relatively disappointing season so far, and will hope winning the Champions League for a third consecutive time will convince the Croatian to see out the remainder of his contract until 2020.