A fee was reportedly agreed, with Arshavin agreeing personal terms and passing a medical.
The Russia international supposedly penned a three-and-a-half-year deal at the Emirates Stadium.
However, a Zenit spokesman was then quoted as saying that the deal had fallen through, "I can confirm that the deal is definitely off," Zenit's Alexei Petrov told Reuters.
General director Maxim Mitrofanov is now claiming talks are still ongoing.
"The clubs have a mutual desire to complete the transaction,” Mitrofanov told Sovetsky Sport at 5.40pm. "Negotiations are continuing."
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