Financial details of the transfer have not been revealed but British media report it was around STG72 million ($A127 million), eclipsing the STG56 million ($A99 million) paid to Borussia Dortmund for striker Pierre-Emerick Aubameyang last year.

Arsenal manager Unai Emery said Pepe was a highly rated and talented winger who was wanted by many of the top teams in Europe.

"Signing a top-class winger has been one of our key objectives in this transfer window and I'm delighted he's joining," Emery said in a statement on Thursday.

"He will add pace, power and creativity, with the aim of bringing more goals to our team."

The 24-year-old Ivory Coast international signed a five-year deal and will wear the number 19 shirt at the English Premier League club.

Pepe, who was also linked with many European clubs, scored 22 goals in France's Ligue 1 last season - second only to Paris St Germain's Kylian Mbappe who scored 33 goals - and also grabbed 11 assists.

"Being here is very emotional because it has not been easy for me," Pepe said.

"I have come a long way and struggled a lot and so signing for this great club is a big reward."

Pepe is Arsenal's fourth recruit of the close season after the club signed Brazilian winger Gabriel Martinelli, midfielder Dani Ceballos on loan from Real Madrid and centre back William Saliba, who has been loaned back to St Etienne for the season.

Arsenal, who finished fifth last season, play a friendly against Barcelona on Sunday before they begin the new league campaign with a trip to Newcastle United on August 11.

Australian Associated Press