The central defender has only played senior football for Valencia, making 41 appearances and scoring one goal last season as a key member of the squad.
His impressive performances have also attracted interest from Real Madrid, Atletico Madrid, and AC Milan.
His acquisition would provide Arsenal manager Mikel Arteta with another defensive option, competing with William Saliba and Gabriel Magalhaes.
Arsenal close in on Mosquera
According to various media outlets in England and Spain, via Sportal and Fabrizio, Arsenal are closing in on Mosquera.
The 21-year-old Spanish centre-back has agreed to terms with the Gunners. However, a deal between the two clubs is yet to be finalised.
Valencia have already rejected Arsenal's initial offer of around €14 million for the Spanish youth international.
Arsenal are expected to submit an improved offer for Mosquera, in the region of €20-25 million, including potential add-ons, which is anticipated to be accepted by the Spanish side.
Arsenal are also expected to finalize three other transfers soon: midfielders Martin Zubimendi from Real Sociedad and Christian Nørgaard from Brentford, as well as goalkeeper Kepa Arrizabalaga from Chelsea.