The 18-year-old midfielder has been courted by Manchester City in recent months and was set to sign for the Citizens.
But the youngster opted for a move to the Emirates Stadium instead despite City’s huge contract offer.
Bennacer impressed Arsenal scouts while playing for the French U17, prompting a move for him.
The highly creative attacking midfielder is expected to join Arsenal’s U21 squad this summer with the hope of a first team place in the future.
Bennacer has already made several first team appearances for AC Arles-Avignon in the Ligue 2 and is tipped to make it to the top of the game.
Arsenal would be required to pay a compensation to his club and it has been put at around £150,000.