Newcastle United are reportedly ready to make a move for the Gunners midfielder, and Everton should also join the race to sign him.
Xhaka, who joined the Gunners in 2016 from Borussia Monchengladbach for a fee in the region of £30 million, will ask to leave the club in January.
The 27-year-old has fallen out of favour at Arsenal, and sees his future away from the north London club.
Xhaka fell out with Unai Emery and has been stripped off the captaincy as well.
This is an ideal opportunity for Everton to make a move for Xhaka.
The Toffees have made a poor start to the season, and Marco Silva could be eyeing the January transfer window to bring in one or two quality players.
Bolstering the midfield is top priority as the club need to fill the void left by Idrrisa Gueye. Xhaka is a highly experienced player, a natural leader, and could be a perfect fit at Everton.
The Swiss midfielder will be looking for a fresh new start in his career, and Everton should be looking to provide him with that opportunity. Being left-footed, he will bring balance to the midfield alongside Morgan Schneirdin.
Everton must move ahead of Newcastle and make his signing a priority in January.