Italian news outlet Sportsmediaset
The 25-year-old is currently on Copa America duty with current Gunner Alexis Sanchez, where he is leading that charge for the tournament’s Golden Boot with four goals.
He spent the previous season on loan with Queens Park Rangers, but his four goals in 22 games failed to help the Hoops avoid the drop back down to the Championship.
Sanchez himself has apparently played a part in facilitating the talks, according to the Metro, after telling Arsene Wenger of his desire to link up with Vargas at the Emirates.
Since Napoli allowed him out on loan for the past three seasons with QPR, Valencia and Gremio, it is thought that he is surplus to requirements at the San Paolo, and the Italians are keen to get him off the books as soon as possible.