According to the Athletic, the 21-year-old has been training with a fitness coach following a meeting with Arteta and technical director Edu.
Arteta was said to be left unimpressed by Guendouzi's behaviour in Arsenal's 2-1 defeat to Brighton in June when he appeared to grab the throat of Brighton striker Neal Maupay.
The report also states the French midfielder and his representatives will meet with Arsenal in the coming days as the club hope to use him in a swap deal this summer.
Analysis - Guendouzi looks to be a scapegoat
From being a first-choice midfielder under Unai Emery to not even training with the squad under Arteta, it looks like Guendouzi's time is up.
Atletico Madrid's Thomas Partey is reportedly set to come in this summer, which would push the Frenchman down the pecking order. Alternatively, Guendouzi may even be used in a swap deal to bring in Partey.
Thomas Partey: Guendouzi's replacement at Arsenal?
Image credit: Getty Images
The France under-21 international has displayed footballing maturity during his time in north London, but his hot-headed nature apparently means he simply cannot be an Arteta player.
Should he be sold on that basis though? Not necessarily. His displays in a deep-lying playmaker role have been impressive since he was handpicked from Lorient in 2018.
Through good coaching, the necessary support and the space and time to grow his mental approach to the game can be worked on.
But Arteta, who has limited top-flight management experience, looks keen to make a scapegoat of the young man and show to the experienced players (are you watching Mesut Ozil) he is a tough guy who can make big decisions. So he probably will move on.
It's a shame because the Guendouzi's footballing talent is undeniable and his treatment has been harsh. Provided the Athletic's report is 100% factually true of course.