Arsene Wenger is desperate to tie the playmaker down to a new contract, with his current deal still set to expire in the summer of 2018.
If an agreement is not reached though, Arsenal may be forced into selling one of their star men at the end of the season.
Ozil is the Gunners' top earner on wages of £180,000 a week, but he wants a pay rise to at least £250,000 a week.
Wenger's future as manager will also play a key role in the German committing his future further in north London.
Mesut Ozil is yet to agree a contract extension at Arsenal
Barcelona are keeping tabs on the 28-year-old's position and are ready to make a move
The boss could yet leave third-placed Arsenal this summer as fan fury will reportedly determine whether he pens another extension at the Emirates, posiing questions over Ozil.
According to the Mirror, Barcelona are keeping tabs on the 28-year-old's position and are ready to make a move if they are given any encouragement.
The La Liga giants have shown interest in signing the World Cup winner twice before, and he is now on the summer wishlist at the Nou Camp.
Arsene Wenger is desperate for Mesut Ozil to stay at Arsenal
Mesut Ozil snapped with a cobra after scooping fifth German Player of the Year
Tue, January 17, 2017
Mesut Ozil has been spotted trying his hand at snake charming after picking up his fifth German Player of the Year award
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Mesut Ozil is snapped enjoying some downtime after scooping the German Player of the Year award
However, it is claimed Ozil's former club and Barca's big rivals Real Madrid have a buy-back clause.
And if Arsenal accept they will have to sell, they must inform Madrid if they intend to do so to another club.
Meanwhile, Alexis Sanchez is also holding firm with his similar demands to Ozil amid interest from Juventus, Paris Saint-Germain and Chinese Super League clubs.