The move came as a slight shock with Man Utd seemingly the favourites to snap up the £5m youngster. A deal with Utd would have meant Ramsey being loaned back to City next season but the deal with Arsenal sees him leave Ninian Park permanently.
"Aaron did me the courtesy of ringing me to let me know his position," said Chairman Peter Ridsdale. "It's a £5m deal - and on a straight cash basis it was the best option on the table.
"We knew he had talent and clearly Premiership clubs knew there was a talent there. Aaron's still very young and from our perspective it was far better not to lose him or still have him on loan. But that's not to be, the lad's made his decision."
Negotiations will now continue between the clubs to bring the deal to a conclusion.