The Freiburg centre-back was believed to have agreed a move to The Emirates after impressing for club an country.
However, the Turkey worldwide defender's current club have denied those claims.
It appeared as though the Gunners were about to get their man when Seyit Mehmet Ozkan, president of Soyuncu's former club Altinordu, claimed that a deal had been done.
The 21-year-old defender's future at the Bundesliga club has come under the scanner as there is speculation that Arsenal are on the verge of signing him in the summer. Bayern Munich needs him too, however he is on the best way to the Premier League'.
They insisted that the rumours are rubbish and they have not been contacted by Arsenal or received any offer for the 21-year-old centre-back.
Bundesliga champions Bayern Munich are keeping a close eye on a player performing on their domestic doorstep, while Arsenal are said to be keen on taking him to England.
The youngster has made 25 appearances for the German outfit this season.
Soyuncu is under contract until 2021, and according to the report last month, he will cost around £30million.