The 34-year-old has been at Arsenal for two seasons after joining from London rivals Chelsea where he won the league title, Champions League and two FA Cups.
He also won the FA Cup with Arsenal last season.
Luiz, who is sidelined by a hamstring injury and has made 30 appearances in all competitions this season, met Arsenal officials on Friday.
The departure would be announced officially in July when his contract expires according to Daily Mail
Arsenal are ninth in the Premier League with two matches remaining and nine points behind fourth-placed Chelsea.