Sevilla president Jose Castro has revealed that his club have held "very positive" talks with Monchi over a return to the Estadio Ramon, in what is a huge blow to Arsenal.
Sevilla sacked head coach Pablo Machin on Friday and director of football Joaquin Caparros has stepped into the role, meaning that there is a position open at the Estadio Ramon.
Monchi worked with Sevilla for 16 years before leaving for Roma, but left the Italian side by mutual consent last week.
Sven Mislintat left his role as Arsenal's head of recruitment in February, meanwhile, and Monchi has been strongly linked with a move to the Emirates Stadium over the last few weeks.
The Gunners are facing the possibility of losing out to Sevilla, though, with the Spanish outfit keen to bring the 50-year-old back to the club.
"Sevilla now need a sports director and we have looked for the best," Castro told reporters. "And the best is Monchi. Our conversations go well with him. The conversations have been very positive."
Monchi discovered the likes of Alberto Moreno, Jesus Navas, Sergio Ramos, Dani Alves and Ivan Rakitic at Sevilla.
