Rice will reportedly cost the Gunners £100million, plus £5million in add-ons, with the player set to undergo a medical this week.
In a long-winded transfer saga, Arsenal were hoping to pay for the England international with instalments over five years but West Ham were pushing to receive full payment by the end of 2024.
It is understood a compromise has finally been reached with the final amount due in the summer of 2025 - primarily to help the Hammers' delicate financial position after the club was placed on UEFA's financial fair play watchlist last year.
The Gunners already had two previous bids for their top transfer target turned down before Manchester City then entered the race.
City walked away after their last-minute £90million bid was rejected last month.
Arsenal are investing heavily to challenge treble-winners City at the top of the Premier League. They have already signed German forward Kai Havertz from Chelsea for £65million, while Ajax defender Jurrien Timber is set to join the club for £40million.
They are also expected to bid for Southampton midfielder Romeo Lavia, who would cost in the region of £45m.
