But now, fresh reports from Marca claim that Madrid are unwilling to let Khedira leave the Bernabeu on a free transfer, and are eager to cash in on the holding midfielder.
That news has come as a major boost to Arsenal, who have been closely monitoring the German international this summer.
Reports earlier this month claimed the north-London side had agreed a £24m deal for the holding midfielder, who is eager to leave the Bernabeu this summer.
But his move to the Emirates has stalled over wage demands.
However, Khedira has now lowered his wage demands in an attempt to seal a move to Arsenal this summer, and link up with international team-mates Lukas Podolski, Mesut Ozi, and Per Mertesacker.
Chelsea are also interested in acquiring Khedira services this summer, but it is highly unlikely that they will make a bid for him, as Blues boss Jose Mourinho has insisted the club have finished their summer spending spree.